Lawyer for Martha Stewart’s Broker Takes Over SAC Case
Richard Strassberg, the New York lawyer who represented Martha Stewart’s broker Peter Bacanovic in their 2004 criminal trial, will head a legal team defending former SAC Capital Advisors LP portfolio manager Mathew Martoma.
Martoma, 38, is charged in what prosecutors say is the biggest insider-trading scheme in history. Strassberg, of the 800-lawyer firm Goodwin Procter LLP, will take over Martoma’s case from Charles Stillman and his New York firm, Stillman & Friedman, both firms said today.
“We wish Mathew Martoma all the best,” Stillman said today in a statement.
Martoma is charged with conspiracy and securities fraud for allegedly using inside information about a clinical drug trial to make $276 million for SAC.
Prosecutors claim Martoma traded on tips from a physician who was in charge of monitoring tests of bapineuzumab, or bapi, a drug to treat Alzheimer’s disease. Martoma used the tips to trade in Elan Corp. and Wyeth LLC, the government said.
When Martoma learned the companies would report negative data on the drug, he had a 20-minute phone call with SAC’s founder, Steven A. Cohen, according to the government.
SAC, based in Stamford, Connecticut, began liquidating its $700 million position in Elan and Wyeth the day after the call, the government said. SAC then profited by taking short positions in the stock, prosecutors said.
The fate of SAC’s Cohen may hinge on whether Martoma chooses to plead guilty and cooperate with investigators or go to trial and seek an acquittal.
Strassberg will lead a team of four Goodwin Procter partners that also includes Roberto Braceras, John Farley and Dan Roeser, according to Lee Feldman, a firm spokesman. The firm will represent Martoma in the criminal case and in related SEC and civil litigation, Feldman said.
Bacanovic, a former Merrill Lynch & Co. broker, was convicted with Stewart of lying to investigators who were probing the domestic diva’s sale of stock in a friend’s company. Strassberg also represented Wegelin & Co., the Swiss bank that pleaded guilty to helping U.S. taxpayers hide more than $1.2 billion from the Internal Revenue Service.
Stillman represented Mark Swartz, the former Tyco International Ltd. (TYC) chief financial officer who was tried with former chief executive Dennis Kozlowski on charges of looting the company through loans, bonuses and the sale of inflated shares. The two men were convicted in 2005 after an earlier prosecution ended in a mistrial.
Strassberg and Stillman were both in the Manhattan federal courthouse on Jan. 3 representing clients entering pleas in criminal cases. In U.S. District Judge Jed Rakoff’s court, Wegelin, represented by Strassberg, pleaded guilty. Martoma, represented by Stillman, pleaded not guilty before Judge Paul Gardephe.
The case is U.S. v. Martoma, 12-cr-00973, U.S. District Court, Southern District of New York (Manhattan).
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