SAC Capital's Martoma Ordered to Report to Miami PrisonBob Van Voris
Ex-SAC Capital Advisors LP portfolio manager Mathew Martoma, convicted in what prosecutors say is the biggest insider-trading case against an individual, must begin serving his nine-year sentence at a Miami federal prison camp in three days.
U.S. District Judge Paul Gardephe ordered Martoma to report to prison by 2 p.m. on Nov. 20, rejecting his request to remain free through the Thanksgiving holiday and delay the start of his sentence until Dec. 1.
The prison complex where Martoma, 40, will serve his time once held former Panamanian dictator Manuel Noriega and currently houses Sanjay Kumar, the former chief executive officer of CA Technologies Inc. convicted of fraud charges in 2006.
Martoma was convicted at a trial for using illegal tips to make $275 million on trades in Wyeth LLC and Elan Corp. Plc. He had been scheduled to report to prison Nov. 10. The start of his sentence was delayed while a federal appeals court considered his emergency motion to remain free on bail while he appeals. The court denied Martoma’s bail request Nov. 12.
The minimum-security camp where Martoma is to be incarcerated has 353 inmates, according to the Federal Bureau of Prisons website. An adjacent low-security prison houses 1,060. Gardephe recommended that Martoma be imprisoned in Miami, at the request of his lawyers, because it’s near the home in Boca Raton, Florida, where he lives with his wife and three children.
Martoma was ordered to forfeit the $9.4 million bonus he made for the illegal trades. The government is seeking to seize the Boca Raton home and more than $4 million held in three accounts.
At the trial this year, prosecutors said Stamford, Connecticut-based SAC Capital liquidated a $700 million position in Elan and Wyeth in July 2008 within days of Martoma learning inside information about negative clinical tests on the Alzheimer’s disease drug bapineuzumab. The sell-off began a day after Martoma had a 20-minute telephone call with SAC Capital founder Steven A. Cohen, prosecutors said.
Cohen, who hasn’t been charged, was named in an administrative action by the U.S. Securities and Exchange Commission for his alleged failure to supervise Martoma and other employees at his firm who were convicted of insider trades.
Visiting hours for Martoma’s camp are on Friday, Saturday and Sunday. The prison operates a factory that makes jackets and linens, for starting pay of 23 cents an hour, according to the Admission and Orientation Handbook for the prison camp.
The case is U.S. v. Martoma, 12-cr-00973, U.S. District Court, Southern District of New York (Manhattan).