Martoma shouldn't get bail during appeal, says prosecutors

Former SAC Capital Advisors LP portfolio manager Mathew Martoma shouldn't be allowed to remain free on bail while he appeals his insider-trading conviction, federal prosecutors said.

The government on Friday asked a three-judge panel of the federal appeals court in Manhattan to deny Martoma's bail request, arguing that jurors were given "overwhelming evidence" of Martoma's guilt at his trial. The panel is scheduled to hear arguments on Martoma's bail request November 12.

Martoma, 40, was sentenced to nine years in prison after he was convicted of making $275 million for SAC by using illegal tips to trade in Elan Corp. and Wyeth LLC. He asked the appeals court to grant him bail after the trial judge denied a similar request.

"Martoma has failed to carry his burden of showing that his appeal raises a substantial question of law likely to alter the judgment of conviction, as required for this court to order bail pending appeal," the government said in a court filing.

Martoma, who was scheduled to report to prison November 10, won a temporary delay while the appeals court decides whether to grant him bail.

Bail request

In his bail request, Martoma claimed US District Judge Paul Gardephe made errors during the trial, including excluding testimony by SAC founder Steven Cohen about his own Elan and Wyeth trades. Martoma also faulted the judge for keeping jurors from hearing an expert witness testify that public information showed that Elan was overvalued in July 2008.

Prosecutors claimed Stamford, Connecticut-based SAC liquidated a $700 million position in Elan and Wyeth that month within days after Martoma learned inside information about negative clinical tests on the Alzheimer's disease drug bapineuzumab.

Martoma also claimed the government failed to prove that his source, a physician supervising the bapineuzumab testing, benefited from passing the illegal tips.