[ by Melanie Gretchen ]

Former SAC Capital portfolio manager Mathew Martoma pled not guilty at his arraignment in New York on Thursday.  He was charged with security fraud, based on these allegations:

• from 2006 to 2008, he traded and profited repeatedly from inside information about an Alzheimer's drug that was being developed by Ellan Pharmaceuticals and Wyeth while employed at the hedge fund;

• he shared non-public information with his boss, SAC Capital's founder Steve Cohen, helping the firm earn illicit profits of $276 million - on a combination of trading gains and avoided losses.

U.S. prosecutors have a nearly perfect track record in winning convictions in their insider trading cases - something like 71 out of 72 cases.  And U.S. Attorney Preet Bharara had anticipated (or at least hoped) that he can get an early plea deal from Martoma, which could have possibly led to Martoma agreeing to assist the government as a cooperating witness against Steven A Cohen and SAC Capital.  

It wasn't for lack of trying that prosecution failed to get Martoma to agree to a deal.  They threw heavy negotiations at him, without success.  Martoma refused prosecution's entreaties all throughout December.  The issue of whether he would serve as a cooperating witness thus never was seriously discussed  - as Martoma steadfastly maintained his innocence. 

By entering a "not guilty" plea on Thursday, Martoma presumably solidified his conviction that he's innocent and will fight the charges filed against him.  This resistance by Martoma appears to make it more likely that Martoma will not provide the hoped for assistance in landing Preet Bharara the big fish - Steven Cohen, himself. 

There's a long way to go in this case, and a lot can and will happen.   The next hearing in the case is set for 3/5/13.

[C-I Note: It's interesting to note that, in 2010, Martoma was fired for poor performance.  So far, it would seem things haven't been getting better.]  

For further details, go to [CNBC, 1/3/12].