New York: A former hedge fund portfolio manager accused of passing along information in one of the largest insider trading fraud cases in history appeared in a Manhattan court for the first time on Monday and was released on $5 million bail, though his movements were restricted.
Mathew Martoma, 38, must post $2 million in cash or property by next week to satisfy the new bail requirements, which will limit his travel to New York, New Jersey, Florida and Massachusetts.
Martoma was arrested last week on charges that between 2006 and 2008, he helped to engineer one of the largest insider trading frauds in history. Martoma worked with CR Intrinsic Investors, an affiliate of SAC Capital Advisors. SAC is owned by Steven A. Cohen, one of the world's richest men.
Martoma was not required to enter a plea, since an indictment has not been returned.
"We took care of business today and we'll be back another day," said Martoma's lawyer, Charles Stillman.
Martoma was arrested on November 20. Prosecutors say he exploited an acquaintance with a medical school professor to get confidential, advance results from tests of an Alzheimer's disease drug.
Prosecutors say he shared the information with others, enabling more than $276 million to be made illegally for his fund and others. The government said in court papers that he caused other investment advisers to buy shares in the drug companies, and then he and the others ditched their investments before the public found out about the drug trial's disappointing results, allowing them all to make big profits and avoid huge losses.
The FBI subpoenaed SAC and other influential hedge funds in November 2010. Martoma is the fourth person associated with SAC Capital to be arrested on insider trading charges in the last four years.
Cohen has not been charged with any crime. SAC spokesman Jonathan Gasthalter has said the company and Cohen are cooperating with the inquiry and "are confident that they have acted appropriately."