“Mr. Martoma has made mistakes but, as the many letters of friends, family, colleagues, and acquaintances show, he is a good person,” said Martoma’s lawyer in a lengthy legal submission to Judge Paul G. Gardephe of the United States District Court in Manhattan as he considers sentencing recommendations ahead of next month’s decision.
All well and good that but in the same submission, Richard Strassberg the lawyer to the convicted Martoma, called the sentencing recommendation by the probation department “outrageous”. With paid friends like that who needs enemies?
Martoma and is lawyer don’t believe that he should face more than the 11 years in “prison” that Raj Rajaratanam, co-founder of the Galleon hedge fund, was sentenced to following his conviction.
Mr. Martoma was convicted in February on charges that he helped SAC avoid huge losses on the drug companies Elan Corporation, plc (ADR) (NYSE:ELN) and Wyeth Limited (NSE:WYETH) (BOM:500095) after a friend of his informed him that the two were experiencing troubles in clinical trials on a joint drug production endeavor in 2008. Billionaire founder of SAC Capital, Steven Cohen, after receiving a call from Martoma instructed the fund’s traders on how to best avoid a loss and sell off its positions in the two drug companies. Cohen, avoided charges.
The filing yesterday, suggested that others have done worse.
Ex SAC trader Martoma going to prison
Mr. Strassberg noted that the minimum sentence recommendation is nearly 50 percent greater than the one given to Mr. Rajaratnam, which at the end of the day doesn’t matter. The cases are unrelated and Martoma is going to go to prison for a good portion of his life.
His lawyer, however, is insistent that Martoma did “less wrong”. Beyond the fact that Martoma saved SAC from huge losses, the hedge fund also managed to make $275 million on the information that Martoma was privy to in its trading.
If the roughly 70 inside traders’ sentences, those convicted before him, are any indication Martoma will not see less than a five year sentence and presumably much longer.
Mr. Strassberg, in the filing, also urged Judge Gardephe not to give any weight to the revelation on the eve of the trial that Mr. Martoma had been expelled from Harvard Law School for changing the grades on his transcript and then trying to cover up his misdeeds. He said the publicity surrounding the expulsion had been punishment enough.
The lawyer and client seem a match made in heaven, shame one is going away for some time.