A federal appeals court in New York July 2 upheld the insider trading conviction of Mathew Martoma, the Indian American former portfolio manager for billionaire Steven A. Cohen.
The divided 2nd U.S. Circuit Court of Appeals found enough evidence to establish guilt despite defective jury instructions, according to a Reuters report.
The court decided to uphold the conviction on a 2-to-1 vote. It had upheld Martoma’s conviction and nine-year prison term in August 2017, withdrew its finding at that time that the jury instructions were “not obviously erroneous,” according to the report (see India-West story here).
It said the instructions wrongly allowed a conviction solely on evidence that a Michigan doctor had tipped Martoma about an Alzheimer’s drug trial to maintain a friendship, rather than to offer a benefit or further a “quid pro quo” relationship, the report added.
Chief Judge Robert Katzmann, writing for the majority, nevertheless wrote that “on the compelling facts of this case, it is clear beyond a reasonable doubt that a properly instructed jury would have found Martoma guilty,” Reuters reported.
Martoma, 44, had worked at the CR Intrinsic Investors unit of Cohen’s SAC Capital Advisors LP.
The decision means he will remain in prison, following his February 2014 conviction for making $275 million of illegal gains in Elan Corp and Wyeth, it said.
Circuit Judge Denny Chin again joined the majority, while Circuit Judge Rosemary Pooler again dissented, the report said.
Now called Point72 Asset Management LP, SAC pleaded guilty to fraud and paid $1.8 billion in U.S. criminal and civil settlements. Cohen was not criminally charged.