Martoma fails to avoid jail in insider trading case

The Second US Circuit Court of Appeals on Wednesday rejected Martoma's bid for bail pending appeal, saying he has 'failed to show that the appeal raises a substantial question of law or fact'.
Mathew Martoma, the Indian-origin portfolio manager, sentenced to nine years in jail on insider trading charges for the most lucrative insider trading scheme in US history, has lost his bid to remain free on bail.

Martoma, 40, was sentenced in federal court last month by US District Judge Paul Gardephe for his role as the 'central figure' in the most lucrative insider trading scheme ever charged involving $275 million in illegal profits and avoided losses.

Martoma was also ordered to forfeit a $9.3 million bonus he earned through the insider trading as well as his interests in his Florida home and several bank accounts.

He was ordered to surrender in prison on November 10 and had moved court for bail pending appeal, saying his appeal will raise "several other close questions including that evidence was improperly excluded and his sentence was both procedurally and substantively unreasonable".

The Second US Circuit Court of Appeals on Wednesday rejected Martoma's bid for bail pending appeal, saying he has 'failed to show that the appeal raises a substantial question of law or fact'.

Martoma had won a delay of his surrender to prison while his motion was in appeals court, which also vacated the stay of his surrender date and he would now have to report to prison on a new date.

Federal prosecutors said that given the verdict of the appeals court, there is no basis to further delay the imposition of Martoma's prison sentence.

"The government has confirmed with the Bureau of Prisons that it is prepared to accept Martoma at his previously designated institution as soon as Martoma is ordered to surrender by the Court," prosecutors said.

Martoma's lawyers have however sought permission that he be granted leave to report to prison by November 18 so that he can settle his affairs before his prison term begins and can "spend a few additional days" with his wife and three young children" in order to help prepare the children for the impending separation from their father.

Martoma's jail sentence, among the longest handed down for insider trading, was in line with what Manhattan's top federal prosecutor Preet Bharara had sought before the hearing.

The India-born federal attorney had described Martoma's role in the insider trading scheme as "central" and sought a prison term of over eight years along with forfeiture of his bonus saying the sentence should be "commensurate with the seriousness of the offense conduct and the unprecedented ill-gotten gains that it generated".

Image: Mathew Martoma with his wife Rosemary Martoma. Photograph: Reuters