SAC Capital to Hold Investor Call Wednesday Morning
Facing perhaps its toughest moment yet in the U.S. government's insider-trading probe, SAC Capital will host a special investor call Wednesday morning to field questions about the recently unveiled federal case against former trader Mathew Martoma, say two people familiar with the matter.
SAC management will host an investor question-and-answer session Wednesday before the U.S. markets open at 9:30 a.m. ET, say these people. The Stamford-based hedge fund firm holds quarterly calls to discuss matters of performance, these people added, but additional calls to discuss particular legal issues, while not unprecedented, are also not the norm.
It is unclear as yet whether SAC founder Steve Cohen will participate in the scheduled discussion.
The Department of Justice and the Securities and Exchange Commission last week filed parallel complaints against Martoma, who worked for an SAC unit between 2006 and 2010, alleging he used illegally obtained information about a drug trial to influence trading decisions in 2008.
The positions in question, which included sales of the pharmaceutical companies Elan and Wyeth, now a unit of Pfizer, were sold off that summer shortly before news broke that drug tests the two companies were conducting had yielded disappointing results. The stock trades Martoma advocated, the complaints allege, resulted in profits of $276 million. (Read More: New Breed of SAC Capital Hire Is at Center of Insider Trading Case)
Martoma, 38, was in a Manhattan courtroom Tuesday, where a U.S. magistrate judge informed him of his rights and accepted a $5 million bail bond posting. His lawyer has said his client expects to be fully exonerated. (Read More: Former SAC Fund Manager Has Bail Set at $5 Million)
The government's complaint against Martoma alleges that SAC founder Cohen, identified in the court papers as "Hedge Fund Owner" or "Portfolio Manager A," was closely involved with a July 2008 decision to sell the hedge funds positions in the pharmaceutical stocks. It isn't clear, however, what Cohen knew about where Martoma had gotten the information that led to his sell recommendation.
Cohen and SAC have said they are confident they behaved appropriately and that they are cooperating with the government's probe.
—By CNBC's Kate Kelly; Follow Her on Twitter @KateKellyCNBC