NEW YORK, Mon Nov 26, 2012 – A former SAC Capital portfolio manager was released on $5 million bail on Monday after making his first appearance in a New York court on charges of making illegal trades that hedge fund titan Steven A. Cohen personally signed off on.
Mathew Martoma, 38, of Boca Raton, Fla., was charged last week in what U.S. prosecutors called “the most lucrative” insider-trading scheme ever.
Martoma was accused of helping Cohen’s firm avoid losses and reap profits totaling $276 million in the summer of 2008 by using insider tips he obtained from a doctor about Elan Corp and Wyeth LLC. Martoma worked for CR Intrinsic, a unit of Cohen’s SAC Capital.
Cohen was not charged with wrongdoing, but prosecutors have said in court papers that the “owner” of the hedge fund signed off on Martoma’s recommendation to sell the shares of Elan and Wyeth. A spokesman for SAC Capital said last week that “Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry.”
At Monday’s 13-minute hearing in U.S. district court in Manhattan, Martoma spoke only once, answering “yes, your honor” to a judge’s question. He did not enter a plea.
Martoma’s lawyer, Charles Stillman, last week said that his client was an “exceptional portfolio manager” and he is confident Martoma will be exonerated.
Magistrate Judge James Cott on Monday agreed to a proposed $5 million bail package for Martoma, who has been free on similar bail conditions since making an initial court appearance in a Florida court after his arrest on Nov. 20.