The 40-year-old former portfolio manager for hedge fund SAC Capital Advisors will likely serve his sentence at a federal prison in his home state of Florida. His sentence was supposed to begin on Monday, but a new date will now have to be decided by the trial judge.

Martoma To Begin Serving Sentence After Ruling

Mathew Martoma: Inauspicious ruling

In February Martoma was convicted of running one of the most profitable insider trading schemes in history. He is appealing that ruling, and although this latest decision is not a judgment on the strength of his appeal, it is a bad omen for his chances of walking free.

His role in using insider trading to help SAC minimize losses and gain profits of $275 million landed him with a nine year jail term. Martoma was sentenced in September.

Links to the trial of Steven Cohen

Arguments centered around a pretrial ruling which prevented Martoma’s defense team from using a deposition given by SAC founder Steven Cohen during his own trial. Lawyers for Martoma have contested that this deposition offers an explanation for the rapid sale of a $700 million position that the hedge fund held in two pharmaceutical companies, shortly before they announced disappointing drug trial results.

Martoma is the latest trader to come under scrutiny in a crackdown on insider trading led by United States attorney for Manhattan Preet Bharara, who has so far enjoyed great success in convicting those who manipulated the financial system for their own gain. Prosecutors have claimed that the deposition would not have helped Martoma to explain his trading patterns.

Mr. Cohen was not charged with insider trading, although his company SAC filed a guilty plea in a security fraud case. Cohen currently manages more than $10 billion of his personal wealth through a family office called Point72 Asset Management, although he is still awaiting judgment on a civil administrative proceeding which might see him banned from working in securities.

Before passing judgment on Martoma, the judge stated that the evidence brought to trial proved that Martoma “provided insider information to (Steve) Cohen.”

A spokesman for SAC Capital, Jonathan Gasthalter of high-powered public relations shop Sard Verbinnen, declined to comment on the matter.

H/T Finalternatives