Matthew Martoma, the former SAC Capital Advisors trader accused of helping SAC profit and avoid losses totaling $276 million off of an illegal tip, has pleaded not guilty to charges of insider trading brought against him by federal prosecutors.
His plea decision indicates a forthcoming court battle that could prove disastrous for SAC and its owner Steve Cohen, neither of which have been targeted with fraud suits. The SEC has warned SAC that it is considering filing a fraud lawsuit against the Stamford, Conn. firm. Cohen has told investors and employees that he did nothing wrong.
Dr. Sidney Gilman, the doctor and professor who allegedly leaked early results of clinical drug trials to Martoma, has promised to testify against him in exchange for non-prosecution for his role in the scheme. The odds would seem to be stacked against Mr. Martoma.
Nevertheless, he exited the courtroom looking upbeat. His pretrial hearing is scheduled for March 5.
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