A federal judge in New York is set to deliver what could be the harshest sentence for insider trading to date.
Mathew Martoma, 40, a former portfolio manager at CR Intrinsic, a subsidiary of SAC Capital, was found guilty of insider trading in February for what the government said was his role as "the central figure in the most lucrative insider trading scheme" in U.S. history.
The illegal trades were made between 2006 and July 2008 in the pharmaceutical stocks Elan and Wyeth, netting SAC $276 million in profits and avoided losses.The government is also seeking forfeiture of a $9.4 million bonus prosecutors say Martoma received in 2008 for the illegal trades.
According to federal sentencing guidelines, Martoma could face a prison term of 15 years to nearly 20 years. Manhattan's top federal prosecutor, Preet Bharara, believes Martoma's incarceration should be above the Probation Department's recommendation of eight years due to "the seriousness of the offense conduct and the unprecedented ill-gotten gains that it generated."
During Martoma's trial, it was revealed that SAC founder Steve Cohen was the government's main target in the investigation. The prosecution's key witness, Dr. Sidney Gilman, testified that when he was first approached by the FBI in September 2011, the agents interviewing him said he "was only a grain of sand, as is Mr. Martoma," and that "they were really after a man named Steven A. Cohen."
Read MoreInsider trading defined
Numerous high-ranking SAC employees also testified in the trial, including general counsel Peter Nussbaum and the global head of execution, Phillipp Villhauer, who took the stand for the defense.
SAC Capital pleaded guilty in November 2013 to insider trading violations, which included a five-year probation term and a record $1.2 billion penalty ($900 million fine, in addition to a $284 million penalty in connection with a civil forfeiture action).
Cohen has since returned all outside investor capital, dropped the name SAC, and has opened a new family office called Point72, which manages the assets of its founder and certain eligible employees.
Sentencing for Martoma is scheduled for 3 p.m. EDT Monday. Martoma is expected to appeal after the sentencing.
Cohen in the crosshairs
Cohen himself still faces a separate Securities and Exchange Commission investigation over failure to supervise his employees that could result in a lifetime ban from the securities industry.
In another SAC case, portfolio manager Michael Steinberg was convicted of five counts of insider trading in December 2013, and subsequently sentenced to 42 months in prison. He is free pending an appeal.
A class action lawsuit against SAC and Cohen is also underway over alleged insider trading in Elan and Wyeth. A federal judge in Manhattan recently denied the hedge fund's request to dismiss the investor lawsuit.
The harshest prison sentence in an insider trading case to date is the 12-year prison term for Matthew Kluger, a former corporate lawyer who was convicted of providing illegal tips in a $37 million scheme in New Jersey.
—By CNBC's Dawn Giel