Bring out the smelling salts!
Former SAC Capital Advisors portfolio manager Mathew Martoma doesn’t want jurors in his upcoming insider trading trial to know he fainted when FBI agents first approached his Florida mansion, court papers show.
The disgraced hedge fund honcho — accused of participating in the biggest inside trade ever — passed out on his front lawn after two G-men approached him on Nov. 8, 2011, and told him they wanted to talk about his involvement in the alleged 2008 felony.
Prosecutors, in a flurry of filing ahead of the scheduled Jan. 6 start of Martoma’s trial, maintain the fainting is “evidence of his consciousness of guilt.”
But defense lawyers told the judge that talk of the faint would add up to taint.
Fainting has been admitted as circumstantial evidence of consciousness of guilt in only one case, Martoma’s lawyers noted.
“Evidence of Mr. Martoma’s fainting is not probative of his guilt or innocence and would serve only to distract the jury with sensational but irrelevant facts,” they wrote in a Dec. 23 memo supporting their motion to exclude the fainting evidence.
The feds moved to counter the defense’s offensive by noting that Martoma didn’t pass out when he was initially told by the FBI they were asking him about a former associate at SAC.
It was only when they admitted they had lied to him and that they wanted to ask about insider trading involving him that Martoma fainted, leading them to conclude that being the target was what made him anxious.
Martoma’s lawyers also have asked the courts to exclude evidence that Martoma was fired from SAC in 2010.
Prosecutors want to tell the jury as much because SAC’s under-performance in 2009 and 2010 — and the firm’s alleged refusal to pay his bonuses — “demonstrates viscerally what Martoma understood, in 2006-2008, what would happen if he did not find a way to make money for the firm.”
Martoma’s lawyers called that reasoning a “logical fallacy” and a “non sequitur.”
Martoma’s alleged insider trading involved two pharmaceutical stocks, Elan and Wyeth, which made SAC $276 million in profits and averted losses.
The trial of the former SAC moneyman follows by less than three weeks the conviction of another SAC big, Michael Steinberg.
Steinberg created a stir in a Manhattan federal court when he fainted just as jurors were handing their verdict to the judge.
Steinberg, after he came to, was convicted of conspiracy and four counts of securities fraud at the once-$15 billion hedge fund run by Steve Cohen.
Steinberg became the seventh SAC exec to be convicted in the far-reaching insider trading probe by US Attorney Preet Bharara, who has an unbroken string of 77 insider trading convictions.
In the recent Steinberg case, the government’s case hinged on the testimony of former tech analyst Jon Horvath, who said he began supplying his boss with inside information after a poor bout of performance made him fear for his job.