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Martoma Expert Witness Testimony Sought Barred by U.S.

Jan. 21 (Bloomberg) -- Testimony by one of Mathew Martoma’s expert witnesses at his insider trading trial should be barred, and another one’s curtailed, because defense lawyers failed to make adequate disclosures about what they’ll say, U.S. prosecutors told a federal judge.

Prosecutors’ objections to the defense testimony of expert witnesses Paul Gompers, a Harvard Business School professor, and Thomas Wisniewski, a faculty member at the New York University School of Medicine, were made in a letter to U.S. District Judge Paul Gardephe in Manhattan yesterday.

“The government and defense have conferred with each other in these issues and are in broad disagreement,” prosecutors told Gardephe.

Martoma, a former SAC Capital Advisors LP fund manager, is accused of using confidential drug trial information to benefit the hedge fund by $276 million in trades of Wyeth and Elan Corp. Opening statements in his trial on conspiracy and securities fraud charges took place Jan. 10.

Prosecutors asked the judge to keep out Gompers’s proposed testimony, or at least limit it, arguing that it relies in part on a Securities and Exchange Commission deposition given by SAC principal Steven A. Cohen, which has already been excluded from the trial. They also object to Wisniewski being allowed to testify as to whose duty it is to maintain the confidentiality of clinical trial results.

Defense attorney Richard Strassberg declined by e-mail to comment on the letter to Gardephe filed by the office of Manhattan U.S. Attorney Preet Bharara.

‘Substantial Research’

In his own letter to the court, Strassberg asked to have until Jan. 23 to answer the prosecutors as “the defense response will require substantial research and drafting.” The defense isn’t likely to begin presenting its case until next week, Strassberg said.

In a Dec. 27 letter to Bharara’s office, Strassberg said Wisniewski would testify about Alzheimer’s Disease and the drug underlying the insider trading allegations, bapineuzumab, which was being developed to treat it, as well as the drug-testing approval process and the responsibility of doctors participating in clinic trials to keep those results confidential.

Gompers would talk about drug development and its effect on the price of drug company securities; why some medications fail their clinical trials; and investment strategies including those used by Martoma and SAC.

The case is U.S. v. Martoma, 12-cr-973, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net

To contact the editors responsible for this story: Joe Schneider at jschneider5@bloomberg.net; Michael Hytha at mhytha@bloomberg.net

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