[ by Melanie Gretchen ]

Former SAC Capital Advisors portfolio manager Mathew Martoma, who pled "not guilty" to insider trading charges, was given the benefit of the doubt by Judge Paul Gardephe, who permitted the defendant and his legal counsel more time to prepare their defense.  Charles Stillman, Martoma's defense lawyer, said he has has received at least 17,000 pages of evidence from the government in recent days - which in addition to the 4 million pages of documents the government had already turned over.  This includes hundreds of thousands of emails that need to be reviewed.

Meanwhile, last Friday the SEC and Stephen A. Cohen's SAC Capital agreed to settle SEC charges of insider trading against two affiliates of that firm:  CR Intrinsic and Sigma Capital Management allegedly traded shares of drug and technology companies based on insider information.  For Mr. Martoma, who is employed by CR Intrinsic,  and is charged with illicit trading in the same drug companies, the settlement will help his defense - though it does not signify the death knell for Mr. Martoma, either.  

90 Day Postponement.   In the Federal District Court for the Southern District of New York, Martoma's lawyer, Charles Stillman, successfully appealed for 90 days to review the government’s evidence related to the so-called most lucrative insider trading scheme ever charged.  The judge issued the delay order nearly 2 weeks before SAC Capital agreed to settle the SEC's insider trading charges.  Given these new developments, the extra 90 days will be especially helpful.

Mr. Martoma was arrested in November on charges he:  (i) corrupted a doctor who had access to secret drug data, and (ii) used that information to help SAC gain profits and avert losses totaling $276 million.  What sets his case apart from other current and former employees indicted in prosecutors' case is that Mr. Martoma collaborated with hedge fund founder Steven Cohen who, at Mr. Martoma's recommendation, sold off almost all of his fund's holding in drug companies Elan and Wyeth, then sold the stock short.  Nevertheless, Mr. Cohen, 56, has not been charged to date.

At least 8 current or former SAC employees have been connected to insider trading while employed at the firm, 4 of whom have pled guilty.  The trial of Martoma will resume on 6/5.

For further details, go to [Dealbook, 3/5/13].