A former hedge fund manager for SAC Capital Advisors LP has been accused of taking part in an insider-trading scheme that netted $276 million. By recommending 15 to 20 years in prison, the probation department for the federal government's suggested sentence would be considered one of the most severe in U.S. history when it comes to insider trading.
This individual's attorney is outraged by the sentencing recommendation that was handed down. While pointing out that his client was "less culpable" than a number of other insider-trading defendants recently prosecuted, he mentioned cases where defendants faced with similar charges received sentences of as little as two years. The attorney stated that his client "was convicted of insider trading over the course of at most two weeks based on one piece of information from one tipper about one event."
The former executive is asking for leniency. He has also received more than 100 letters in his support describing him as a particularly devoted father and husband.
There is debate over whether a benefit of $276 million to anyone ever occurred. At least one individual testified that this executive's information was not relied upon when various trades were made.
Insider trading is just one of a variety of white-collar matters that has made the news in recent years. As the above matter demonstrates, the prosecution of those accused of such acts can often be relentless and the sentencing can be harsh. Any federal investigation is potentially very serious. When a person learns of an on-going federal investigation that may involve even false allegations, it is important to retain an attorney experienced in federal white-collar defense at the earliest possible moment.
Source: Bloomberg Businessweek, "I Only Did It Once: SAC's Martoma Seeks Leniency for Insider Trading," Sophia Pearson and Bob Van Voris, May 29, 2014