Indian-origin fund manager sentenced to 9 years in jail

New York: An Indian-origin portfolio manager has been sentenced to nine years in prison for his role in one of the “most lucrative” insider trading schemes ever involving $276 million and ordered to forfeit a $9.3 million bonus he earned through it.

Mathew Martoma (40) was sentenced in federal court here on Monday by US District Judge Paul Gardephe, who ordered that he also forfeit his interests in his Florida home and several bank accounts as he described Martoma’s conduct as “deeply corrosive to our financial markets,” generating cynicism among investors.

The sentence, among the longest handed down for insider trading, was in line with what Manhattan’s top federal prosecutor Preet Bharara had sought ahead of the hearing. The India-born federal attorney had described Martoma’s role in the insider trading scheme as “central” and sought a prison term of over eight years along with forfeiture of his bonus saying the sentence should be “commensurate with the seriousness of the offense conduct and the unprecedented ill-gotten gains that it generated.”

While handing down the sentence, Gardephe said, “I cannot and will not ignore that the gain is hundreds of millions of dollars more than ever seen in an insider trading prosecution,” adding that “there was nothing accidental about Martoma’s conduct or the gain realised.”

Martoma, a portfolio manager of CR Intrinsic Investors, a division of hedge fund behemoth SAC Capital, was convicted in February this year for collecting confidential information about a high-profile Alzheimer’s drug trial from two doctors and making profits and avoiding losses of $275 million for SAC Capital. 

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