Former SAC manager gets nine years for insider trading

A former SAC Capital portfolio manager was sentenced Monday to nine years in prison after his conviction for insider trading.

US Judge Paul Gardephe also ordered to forfeit about $9.4 million.

Martoma was found guilty in February for making illegal trades in pharmaceutical stocks based on his knowledge of confidential medical testing data.

"Today's sentence of a lengthy prison term is well-suited to the audacity of the illegal trading in this case," said US Attorney Preet Bharara on Twitter.

"The long and short of Martoma's trading is that he traded his liberty, his name and his time with his family for what in the end is nothing."

Martoma's sentencing is the latest ripple from a years-long criminal probe of SAC, a once-mighty hedge fund that in November 2013 agreed to plead guilty to criminal charges of insider trading and pay $1.8 billion to settle them.

SAC's founder, Steven A. Cohen, who has not been criminally charged, has renamed the firm Point72 Asset Management.

Point72 is barred under its government settlement from trading on behalf of clients. Instead, it will oversee Cohen's personal fortune, estimated at $9-10 billion.

In the Martoma case, a pair of doctors testified that they had passed on confidential clinical data showing disappointing testing results from Alzheimer's medications developed by pharmaceutical firms Elan and Wyeth.

SAC sold shares in the companies, saving the firms millions before the results were publicly released and the shares flopped.

Gardephe concluded the transactions resulted in an "illicit" gain of between $200 million and $400 million. The size of the gain helped determine the length of Martoma's sentence under US sentencing guidelines.