Indian-origin hedge fund manager pleads not guilty

Mathew Martoma

An Indian-origin hedge fund portfolio manager has pleaded not guilty to charges that he participated in one of the "most lucrative" insider trading schemes totalling USD 276 million involving information about clinical trials for an Alzheimer's drug.

Mathew Martoma, 38, was arraigned at Manhattan federal court here yesterday before Judge Paul Gardephe and entered a not guilty plea to one count of conspiracy to commit securities fraud and two counts of securities fraud.

"I plead not guilty, your honour," Martoma, who was indicted last month, said for all the three counts he is charged with.

Martoma is the son of Indian immigrants and was accompanied by his wife and parents during his hearing. He faces as many as 20 years in prison on the securities fraud charges and five years on the conspiracy charge if convicted.

He was arrested in November from his home in Boca Raton, Florida and has been free on a five million dollar bail. According to court records, he would continue to remain free on bond.

Martoma was flanked by his lawyers Charles Stillman and Nathaniel Marmur during his arraignment. His next court appearance has been set for March 5. Stillman said he is not discussing any plea deal with the government and maintained that his client is innocent.

"The answer is no," Stillman said on whether he was negotiating a plea agreement.

The defence team is "doing what is necessary for getting a happy ending for Mathew," he said, adding, "Mathew Martoma is an innocent man."

Prosecutors told the judge that they would be presenting evidence in the form of trading and telephone records and e-mails but do not plan to use any wiretap evidence. Assistant US Attorney Arlo Devlin-Brown said the government has collected a 'voluminous' amount of evidence in the case.

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