SACs Mathew Martoma

[Uccmal]

http://www.bloomberg.com/news/2014-09-08/ex-sac-fund-manager-martoma-sentenced-to-nine-years-in-prison.html

 

Okay, The dude is 40 years old.  We was willing to take the fall for Steve Cohen.  He has little kids at home.  I dont get it.  Life is currency that is worth more than money.  I would happily trade Stevie for freedom, but thats just me I guess.  He could always go on the speaking circuit, like Sam Antar. 

 

If he has an agreement with Stevie how can he trust it will be fulfilled?  Stevie has thrown dozens under the bus to save himself. 

 

 

[Andy Dufresne]

He cannot but do not underestimate the power of greed ... it warps decisions

[topofeaturellc]

well unless he's a fool there's been cash in vanuatu or namibia for the last few years.

 

I sort of understood how the other guys could construct a mental model that allowed them to honestly believe they were not guilty, and therefore refuse to roll, but this guy appeared to be dead to rights from the jump.

 

Of course now there are rumors out there Cohen's plan is to evenutally open up his family office to outsiders.  Which blows my mind.

[Palantir]

How do you know he had a choice?

[topofeaturellc]

How do you know he had a choice?

 

to roll on Steve Cohen? I guess its plausible that he was never asked why all of a sudden he had gone from loving to hating a stock for a drug approval literally over night.  But doesn't that seem unlikely to you?  Or that at least someone asked him?

[Vish_ram]

http://www.bloomberg.com/news/2014-09-08/ex-sac-fund-manager-martoma-sentenced-to-nine-years-in-prison.html

 

Okay, The dude is 40 years old.  We was willing to take the fall for Steve Cohen.  He has little kids at home.  I dont get it.  Life is currency that is worth more than money.  I would happily trade Stevie for freedom, but thats just me I guess.  He could always go on the speaking circuit, like Sam Antar. 

 

If he has an agreement with Stevie how can he trust it will be fulfilled?  Stevie has thrown dozens under the bus to save himself.

 

What if he is going to prison for the safety of his family?  You don't leave a criminal enterprise and go back to normal life.

[topofeaturellc]

I wonder which one of the PBs was Stevies button man.

[Palantir]

How do you know he had a choice?

 

to roll on Steve Cohen? I guess its plausible that he was never asked why all of a sudden he had gone from loving to hating a stock for a drug approval literally over night.  But doesn't that seem unlikely to you?  Or that at least someone asked him?

 

Oh, I thought OP meant by "We was willing to take the fall for Steve Cohen" he was withholding information on Cohen during the trial. That I find unlikely.

[topofeaturellc]

Oh. No I think we are talking past one another.

 

 

I think most of us believe he had the goods on SC, was offered a deal by the Government, and for some reason chose not to take it.

 

I thought you were suggesting its possible he didn't have anything concrete he could offer on SC - and I guess that's plausible.  Tho there is evidence of them having out of office 1:1 meetings after the DR. told him the bad study data and just before SAC blew out of the long position and got short.

[Uccmal]

http://www.bloomberg.com/news/2014-09-08/ex-sac-fund-manager-martoma-sentenced-to-nine-years-in-prison.html

 

Okay, The dude is 40 years old.  We was willing to take the fall for Steve Cohen.  He has little kids at home.  I dont get it.  Life is currency that is worth more than money.  I would happily trade Stevie for freedom, but thats just me I guess.  He could always go on the speaking circuit, like Sam Antar. 

 

If he has an agreement with Stevie how can he trust it will be fulfilled?  Stevie has thrown dozens under the bus to save himself.

 

What if he is going to prison for the safety of his family?  You don't leave a criminal enterprise and go back to normal life.

 

Yeah, I guess thats possible. 

[Uccmal]

Oh. No I think we are talking past one another.

 

 

I think most of us believe he had the goods on SC, was offered a deal by the Government, and for some reason chose not to take it.

 

I thought you were suggesting its possible he didn't have anything concrete he could offer on SC - and I guess that's plausible.  Tho there is evidence of them having out of office 1:1 meetings after the DR. told him the bad study data and just before SAC blew out of the long position and got short.

 

I was operating on the assumption he had the ability to make a deal to get to Stevie.  Perhaps he had nothing of value.  We need Michael Lewis on the case. 

[Palantir]

Oh. No I think we are talking past one another.

 

 

I think most of us believe he had the goods on SC, was offered a deal by the Government, and for some reason chose not to take it.

 

I thought you were suggesting its possible he didn't have anything concrete he could offer on SC - and I guess that's plausible.  Tho there is evidence of them having out of office 1:1 meetings after the DR. told him the bad study data and just before SAC blew out of the long position and got short.

 

Yes, I guess that is what I am saying. I find it hard to believe that he would willingly go to prison instead of just taking the deal. It is possible he simply has no material info that implicates SC, which I think is likely, or perhaps he is being threatened.

[merkhet]

Let's not forget that the appeals process isn't done yet. Perhaps he is waiting to exhaust all his options first. Plus, prison isn't fun, so give him some time and perhaps things will change.

[topofeaturellc]

Oh. No I think we are talking past one another.

 

 

I think most of us believe he had the goods on SC, was offered a deal by the Government, and for some reason chose not to take it.

 

I thought you were suggesting its possible he didn't have anything concrete he could offer on SC - and I guess that's plausible.  Tho there is evidence of them having out of office 1:1 meetings after the DR. told him the bad study data and just before SAC blew out of the long position and got short.

 

Yes, I guess that is what I am saying. I find it hard to believe that he would willingly go to prison instead of just taking the deal. It is possible he simply has no material info that implicates SC, which I think is likely, or perhaps he is being threatened.

 

Obviously - this is a totally possible thing.

 

But lets think through the scenarios

 

Set the scene: Dude had been long Elan because he expected a drug approval to happen.  I think like a week before he had been pushing SC to buy the name in his portfolio. SC had even overruled longer-tenured better performing HC PMs on the position.  Then on like a Friday that Doctor email him and tells him he got the results.  The Doctor emails him a pword protected doc that explicitly says its private, material info and the DR def has a fiduciary relationship to Elan shareholders.  Over that weekend we know MM and SC speak and that following week SAC blows out of all of the long position and gets short the name.

 

So thus three plausible scenarios in my mind:

 

1)No one at SAC asked to see MM's research or ask where he got his info from.  There was a pervasive culture of don't ask don't tell outside of each of the individual pods. If this is the case then pretty much everyone in a supervisory role at SAC should be banned for life from the securities industry for failure to supervise.  Even then this doesn't pass the smell test as SAC is noted for having an extremely robust compliance apparatus post some unpleasantness in like the dot.com times.  Not to mention SAC was actually paying this Doctor on MM's behalf, and it was public knowledge the guy was an insider on this particular drug that was key to the thesis on what was one of the firms larger investments.  At a minimum someone in compliance knew there was a relationship.

 

2) There was someone between MM and SC who did the quality control and knew where the info was coming from.  The compliance apparatus protected SC.  I actually think this is the most plausible - but then MM could have rolled on that guy as well as the compliance people. AFAIK he did not.

 

3) SC explicitly knew what was going on.  I actually doubt this was the case.

 

Implictily he had to know. I think he had built an apparatus that encouraged insider trading, but he had insulated himself from the criminality.  So when a guy like MM showed up with a thesis like this, he knew what was going on, but he never saw any proof.

 

[SharperDingaan]

You might want to consider that a deal was deliberately not offered - to raise the ante on the remainder.

With this kind of organization it is far easier, & more reliable, for some people to meet with a permanent accident.

 

SD

[Uccmal]

You might want to consider that a deal was deliberately not offered - to raise the ante on the remainder.

With this kind of organization it is far easier, & more reliable, for some people to meet with a permanent accident.

 

SD

 

I am really surprised that Stevie himself hasn't come to some sort of accident, yet.

[topofeaturellc]

You might want to consider that a deal was deliberately not offered - to raise the ante on the remainder.

With this kind of organization it is far easier, & more reliable, for some people to meet with a permanent accident.

 

SD

 

I'm pretty confident a deal was offered.  The offered deals for much smaller fish than SC, and PB wasn't very discrete in telling folks that SC was who he wanted.

[randomep]

 

My god he looks like a zombie in all the photos. While this does good to restore public confidence in markets, it would be nothing compared to seeing SAC looking like that :)