When Mathew Martoma was confronted by an FBI agent on the
front lawn of his Boca Raton (Fla.) mansion last year with allegations of
insider trading, he was so distressed that he fainted. But apparently it wasn’t
enough to compel the former SAC Capital portfolio manager to cooperate with
federal investigators. That was only the first of several opportunities Martoma
has been given to “flip” and turn on his former boss, SAC founder Steven Cohen,
according to a person familiar with the investigation. So far, Martoma has
declined to cooperate at every opportunity, and time is running out for him to
do so.
The SEC and its colleagues at the Federal Bureau of
Investigation have indeed proven adept at convincing people to work with them
in their multiyear investigation of insider trading, and so far, most
collaborators have been rewarded with leniency…..Martoma may help investigators
home in on Steve Cohen himself, the big fish the investigation appears to be
circling. The fact that Martoma, a 38-year-old father of three young children,
has held out so far is baffling to authorities, according to the person
familiar with the investigation. The main witness Martoma would potentially face
in court—Dr. Sidney Gilman, an 80-year-old physician with a distinguished
medical career who has told prosecutors that he shared material nonpublic
information with Martoma—would likely be a sympathetic character before a jury….
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