Matthew Martoma (Photo by Spencer Platt/Getty)
Earlier this week the federal judge presiding over the Manhattan insider trading trial of former SAC Capital Advisors portfolio manager Mathew Martoma agreed to keep certain unfavorable evidence from the jury, including evidence that Martoma fainted when he was arrested in 2012.
If the jury gets to see what the judge unsealed in the case on Thursday, Martoma’s lawyers at Goodwin Procter may be the ones feeling faint.
In brief order, U.S. District Judge Paul Gardephe unsealed a series of papers filed in the case last month, including the government’s motion to admit eye-popping evidence that Harvard Law School expelled Martoma in 1999. The documents detail why Martoma was kicked out, and it wasn’t for any minor infraction: He allegedly falsified his Harvard transcripts and included them in clerkship applications submitted to 23 federal appellate judges around the country. Then, according to the Manhattan U.S. attorney’s office, Martoma lied about the forgeries to the law school’s administrative board, and even submitted forensic evidence generated by a company that he had secretly created himself. (There’s plenty more, believe it or not, in the government’s motion in limine to admit the evidence.)
Martoma’s lead lawyer, Goodwin Procter’s Richard Strassberg, asserts that the government shouldn’t be allowed to introduce the Harvard-era material, which could be used to argue that Martoma knew how to cover his tracks. Prosecutors allege that Martoma used inside information about a clinical drug trial to help make $276 million in illegal trades while at SAC. According to the defense, the government hopes that the newly-unsealed material will serve as a “sword of Damocles,” preventing Martoma from taking advantage of prosecutors’ lack of certain forensic evidence in the case.