The March 2014 issue of The Champion magazine features William Haddad’s analysis of the verdict in the insider trading case of United States of America v. Mathew Martoma. Will’s article is titled White Collar Crime: The Martoma Verdict and the Perils of Insider Trading Cases. A copy of the article is available here.
In February 2014, the jury in the Southern District of New York found the former SAC Capital Advisors LP manager guilty for three counts of insider trading.
In the article, Will details Martoma’s insider trading scheme, and analyzes the tactics of the prosecution and defense. Will writes:
In the end, however, the jury saw it the government’s way, perhaps latching on to rhetoric that insider trading is just like “cheating” and that Martoma had the “answer sheet before the exam.”
Among the lessons from the verdict, Will concludes that:
Regardless of the result with respect to potential criminal charges against [SAC’s billionaire founder Steven A.] Cohen, U.S. Attorney Bharara’s 100 percent success rate should give defense counsel representing insider trading clients pause. Of the 79 people convicted of insider trading, 12 individuals chose to go to trial, including Raj Rajaratnam, the co-founder of Galleon Group LLC. Mr. Rajaratnam, along with most if not all of the other trial defendants, had significant financial resources with which to retain some of the country’s top white collar defense talent.
But having excellent representation has not been enough. The government has the ability to pick and choose its cases and has the power to obtain wiretaps, as well as the power to offer substantially reduced charges and/or sentences to witnesses.
In addition, jurors do not always grasp the nuanced distinction between aggressive but legitimate market research.
Will Haddad is a partner at Beck Reed Riden LLP. He handles civil litigation involving all kinds of commercial disputes, as well as client responses to government investigations and enforcement actions. He has appeared in state and federal courts, along with various government and industry forums, including the SEC and FINRA.
The Champion magazine is the National Association of Criminal Defense Lawyers (NACDL)’s journal. The magazine offers timely, informative articles written for and by criminal defense lawyers, featuring the latest developments in search and seizure laws, DUI/DWI, grand jury proceedings, habeas, the exclusionary rule, death penalty, RICO, federal sentencing guidelines, forfeiture, white collar crime, and more. The Champion is published ten times per year.
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