Around 9 p.m. on Nov. 8, 2011, a pair of FBI agents pulled up outside Mathew Martoma’s home in Boca Raton, Fla., a 6,200-square-foot mansion tucked behind a circular driveway and lavish palm trees. They were there to talk to Martoma about insider trading at SAC Capital Advisors, his former employer and one of the world’s largest hedge funds. The Securities and Exchange Commission, the FBI, and the U.S. Attorney’s Office in Manhattan were five years into a far-reaching investigation of illegal trading among hedge funds across the country, and just three weeks before, Raj Rajaratnam, the co-founder of the $7 billion fund Galleon Group, had been sentenced to a record 11-year prison term for insider trading. The government was fairly confident that Martoma would lead them to an even bigger prize: one of the richest men in the world and the founder of SAC, Steven Cohen.
From that point on, nothing proceeded quite as the government expected.