Mathew Martoma, the former S.A.C. Capital Advisors portfolio manager accused in what prosecutors have called the biggest insider-trading case ever, was indicted Friday by a federal grand jury in New York on charges that he made $276 million for the firm on inside tips about a clinical drug trial.
Mr. Martoma was accused of using illegal tips about testing of an Alzheimer's disease drug to help S.A.C., the hedge fund founded by Steven A. Cohen, profit from trading in shares of Elan Corp. and Wyeth LLC. He was arrested Nov. 20 and is free on a $5 million bond.
Prosecutors in the office of U.S. Attorney Preet Bharara in New York originally filed charges against Mr. Martoma on Nov. 20 but faced a Dec. 26 deadline to indict Mr. Martoma or ask the court for more time. The indictment could mean that Mr. Martoma, who had earlier rejected government requests to cooperate in their investigation of S.A.C., isn't in plea talks.
He is charged with one count of conspiracy and two counts of securities fraud.
Mr. Martoma is accused of arranging trades in shares of Wyeth and Elan, making $220 million in profits and avoiding $56 million in losses for an unnamed hedge fund.
“Though disappointing, today's events come as no surprise,” Mr. Martoma's lawyer, Charles Stillman, said in a statement. “The simple fact is that Mathew Martoma did not trade on inside information, is innocent of all these charges and we look forward to his ultimate vindication.”
