Martoma’s Ex-SAC Trader Said to Be First Trial WitnessBob Van Voris and Saijel Kishan
The first witness set to be called by prosecutors in the insider-trading trial of former SAC Capital Advisors LP fund manager Mathew Martoma is an ex-SAC trader, two people with knowledge of the matter said.
Tim Jandovitz was employed by SAC from 2005 to 2010, at least part of the time as Martoma’s trader, before leaving to start a sandwich restaurant in Chicago, said one of the people, who asked not to be identified because the matter isn’t public. Assistant U.S. Attorney Arlo Devlin-Brown said in court yesterday that Jandovitz would be called to testify as early as this afternoon, once a jury is selected and lawyers make their opening arguments in the case.
Martoma allegedly used inside information on a clinical drug trial to make $276 million for SAC in the shares of Wyeth and Elan Corp. He’s charged with conspiracy and securities fraud.
Martoma’s trial began yesterday with jury selection in Manhattan federal court, in the same courtroom where SAC manager Michael Steinberg was convicted on Dec. 18 of conspiracy and securities fraud.
U.S. District Judge Paul Gardephe, who’s overseeing the trial, said he hopes to have a jury by lunchtime today, leaving the afternoon for opening statements. Jandovitz could be called late today if there’s time, Gardephe said.
Jandovitz attended Boston College and worked for Jefferies Strategic Capital Opportunities in New York, according to a profile on LinkedIn. Richard Khaleel, a Jefferies spokesman, didn’t immediately respond to voice-mail and e-mail messages seeking comment on Jandovitz.
After working at SAC for five years, Jandovitz opened Bel 50, a restaurant in Chicago that sold sandwiches on Belgian waffles, according to a September 2012 article in Crain’s Chicago Business. Crain’s reported in June that the restaurant had closed.
Eighty potential jurors, bundled against the 11-degree cold outside the Thurgood Marshall U.S. Courthouse in downtown Manhattan yesterday morning, filed into the courtroom where Martoma is being tried in what prosecutors have called “the most lucrative insider-trading scheme ever charged.”
Gardephe warned the group to avoid any news about Martoma, SAC founder Steven Cohen, SAC and CR Intrinsic Investors LLC, the SAC unit where Martoma worked.
“It is vitally important that the jury’s verdict be based solely on the evidence that is presented in this courtroom,” Gardephe told the prospective jurors.
The judge gave the group a summary of the case and court clerks passed out six-page questionnaires to determine whether the prospective jurors could be fair. Prosecutors and lawyers for Martoma, supervised by the judge, are choosing 12 jurors and four alternates for the trial, which is estimated to take 3 1/2 weeks.
Gardephe allowed the jurors to go home yesterday after filling out the questionnaires. In a hearing later in the day, he eliminated 26 of them from the pool based on their answers. Potential jurors excused from the case included people who said they couldn’t be fair because of prejudice against Wall Street, prepaid vacation plans or business contacts with SAC.
Juror 79 was excused after writing that she had “a political bias against Wall Street, its practices and its excessive greed.”
Because Gardephe’s usual courtroom is too small to accommodate all the expected lawyers and spectators, Martoma’s trial is being held in a large room on the first floor of the courthouse.
Last year, Gardephe presided there over the trial of Gilberto Valle, the “Cannibal Cop” who was convicted of conspiring to kidnap women and cook and eat them.
Also tried in Courtroom 110 were Julius and Ethel Rosenberg, who were convicted in 1951 of conspiring to pass atom-bomb secrets to the Soviet Union. The Rosenbergs were executed in the electric chair two years later.
In 2004, Martha Stewart and her broker, Peter Bacanovic, were convicted in the courtroom on charges stemming from an insider-trading probe. Bacanovic’s lawyer in that trial, Richard Strassberg, is leading Martoma’s defense.
Before the potential jurors entered the courtroom yesterday, Martoma, dressed in a dark suit and tie, sat alone at the far end of the defense table, his hands together and head down. Martoma unclasped his hands and crossed himself.
The case is U.S. v. Martoma, 12-cr-00973, U.S. District Court, Southern District of New York (Manhattan).