SAC’s Cohen Focus of Trial as Martoma Rebuffs U.S.

Mathew Martoma may have the one thing prosecutors have been unable to find in their probe of SAC Capital Advisors LP: a direct link between founder Steven Cohen and insider trading. Having refused to cooperate, Martoma now faces trial for what the government claims was the biggest illegal trade in U.S. history.

Jury selection in the prosecution of the ex-SAC portfolio manager is set for Jan. 7, barring a last-minute plea deal. He is accused of benefitting the hedge fund by $276 million in trades of Wyeth and Elan Corp., using secret tips from a doctor supervising trials of an Alzheimer’s drug. The U.S. said SAC reversed a bullish stance on the drugmakers, liquidating a $700 million position and selling the stocks short a few days after a 20-minute phone call between Martoma and Cohen in July 2008.