Supreme Court declines chance to review insider trading prosecutions

The Supreme Court on Monday declined to review the case of Mathew Martoma, who was convicted in one of the most profitable insider-trading schemes in recent history.

Lawyers for Martoma, a former portfolio manager who is currently serving a nine-year sentence, have argued that the jury in his trial was not properly instructed and say there was insufficient evidence to back a conviction.

{mosads}But the Court of Appeals for the Second Circuit in 2018 upheld Martoma’s sentence, and the unsigned order from the justices on Monday effectively shuts the door on the case.

Martoma’s case gave more power to prosecutors in insider-trading cases, with a panel on Second Circuit Court of Appeals in 2017 overturning a prior ruling from the same court that found there must be a “meaningfully close personal relationship” between the person providing the inside information and the individual receiving it.

The same appeals court in 2018 found that the jury instructions in the case were erroneous. However, they also stated that Martoma would have been convicted regardless.

If the Supreme Court had taken up the case, the justices would have had the opportunity to curb insider-trading prosecutions.

Martoma, a former portfolio manger for billionaire Steven Cohen, was accused of illegally making $275 million after receiving a confidential tip about an Alzheimer’s medication. He was convicted in 2014.