(Bloomberg) — Former SAC Capital Advisors LP portfolio manager Mathew Martoma asked a judge to force the government to turn over evidence that he says can help him beat insider trading charges as his case goes to trial next month.
Martoma in a request filed today in federal court in Manhattan said prosecutors have failed to provide him with communications between the government and lawyers for the two scientists who allegedly gave him non-public information about drug trials and who will be key government witnesses.
Martoma, 39, is scheduled to go on trial Jan. 6, weeks after a federal jury found another former SAC Capital manager, Michael Steinberg, guilty of using illegal tips to trade stocks of technology companies. Last month, SAC Capital agreed to plead guilty and pay a record $1.8 billion for perpetrating an insider-trading scheme stretching back to 1999.
Prosecutors in the case against Martoma claim SAC liquidated its $700 million stake in Wyeth and Elan Corp. in July 2008 and then shorted the stocks, within a week of Martoma obtaining confidential information about negative test results from a clinical trial on bapineuzumab, a drug intended to treat Alzheimers disease.
In todays filing, Martoma says the two scientists, Sidney Gilman and Joel Ross, initially told the government they werent involved in passing insider information to him. Martoma said those assertions contradict the charges against him.
Nonprosecution Agreements
Both Dr. Gilman and Dr. Ross received nonprosecution agreements in exchange for their testimony against Mr. Martoma, according to the filing. Mr. Martoma reasonably believes that the government must have communicated with counsel for Drs. Gilman and Ross regarding potential criminal charges in the absence of their cooperation.
The discussions between the government and the lawyers for the two men are material, exculpatory information that must be disclosed, Martoma said.
Manhattan U.S. Attorney Preet Bharara said after SACs plea that his investigation of the Stamford, Connecticut-based hedge funds employees continues and that the firms plea agreement doesnt provide any individual immunity from prosecution.
While SACs billionaire founder Steven Cohen, 57, hasnt been charged with a crime, the U.S. Securities and Exchange Commission filed an administrative action against him in July.
The case is U.S. v. Martoma, 12-cr-00973, and the Steinberg case is U.S. v. Steinberg, 12-cr-00121, U.S. District Court, Southern District of New York (Manhattan).
