Indian American Accused of Insider Trading

Monday, 30 June 2014, 18:07 IST
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Bharara said Martoma caused approximately USD 750 million worth of Elan and Wyeth securities to be traded based on the illegal inside information, netting profits and avoiding losses of USD 275 million for SAC Capital.

 

According to federal sentencing guidelines, Martoma faces a 15- to 19-year prison term. Bharara said while the government does not oppose a sentence below the 15-19 years range, Martoma should be given "a sentence that nevertheless includes a substantial period of incarceration that is commensurate with the seriousness of the offense conduct and the unprecedented ill-gotten gains that it generated".

 

"A significant period of imprisonment toward the high end of the insider trading sentences imposed by courts in this District - and above Probation's recommendation of 96 months - is warranted," Bharara said.

 

"Martoma's role in the offence was central. Martoma was not a passive recipient of inside information; he urged those with duties to Elan and Wyeth to share with him information that breached these duties," Bharara said rejecting claims made by Martom'a defence that he had "dedicated himself to a lifetime of (good work) and giving".

 

"Martoma's post-graduate working life has been limited to highly-paid work for hedge funds. The bulk of Martoma's earnings from his hedge fund career - the entirety of his USD 9 million bonus from SAC Capital - were the proceeds of securities fraud," Bharara said.  Federal prosecutors also noted in the sentencing memorandum that Martoma had been expelled from Harvard University in 1999 for allegedly doctoring his law school transcript to try to gain a federal clerkship.

 

Martoma had even changed his name from Ajai Mathew Thomas before applying to Stanford University, where no one knew that he had been expelled from Harvard. Following his conviction, Martoma was stripped of his MBA degree by Stanford business school, the first time the prestigious US institution has revoked a graduate's degree.

 

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Source: PTI