Progressive Prison Project

Innocent Spouse & Children Project

Greenwich, Connecticut

Me, Martoma and the Government’s Dirty Wins
By James Fleishman – Guest Blogger

James Fleishman contacted us the day after he was “featured” on PBS’s Frontline’s, “To Catch a Trader.”  He shared with us his compelling story – including being misled and misquoted on Frontline. We have since stayed in touch and invited him to write a guest blog. Our ministry’s policy is to not comment on the tragedies of individuals – but we make no restrictions on guest bloggers. 


Earlier this month former SAC hedge fund manager Matthew Martoma walked out of a federal courthouse in Manhattan, freshly convicted on insider trading charges that will likely imprison him for ten years or longer. His wife Rosemary held his hand as they walked down the courthouse steps.  The press had followed the case closely and the attractive couple can be seen in hundreds of shots outside the courthouse I know so well. In nearly all of these pictures Mrs. Martoma is smiling widely and dressed very fashionably, clutching her husband’s hand. She appears to be arriving at the symphony or ballet, not a federal courthouse.  Her husband always looks much more somber.

Minutes after the jury’s verdict, Mrs. Martoma held her husband’s hand but looked miles away. You could tell she’d been crying. In one picture, her eyes seemed to plead for ‘HELP’ as she stared directly into the camera lens. She looked as if she was the one who’d just been convicted. Looking at her, I thought about my own wife. I was alone when I walked down those same steps after my conviction in September of 2011. My wife was home in California with our infant and toddler.  After seeing the candid, anguished shot of Mrs. Martoma I was grateful for that.

After the Martoma verdict, the press was quick to applaud US Attorney Preet Bharara for his perfect record (79-0) in his crusade against insider trading over the past few years. He’s been on the cover of Time Magazine and he was recently praised in Frontline’s completely one-sided piece, To Catch a Trader, applauding the government’s war on insider trading. Meanwhile, no one has gone to jail for the mortgage-backed securities fraud that crippled our economy, costing millions their jobs and homes. But we’re not supposed to spend too much time thinking about that. The Feds want us to know there’s a new sheriff in town busting the bad guys on Wall Street. Just as the government looked at SAC’s outsized returns over the years with suspicion, the public should understand what has fueled Bharara’s perfect record: cooperating witnesses doing and saying anything to save their own skins.

Cooperators are the bedrock of our justice system.  Sure, if someone is caught up in wrongdoing and looking for a way out I don’t blame them
for agreeing to testify to whatever “facts” the government feeds them. But what happens when the government asks for help from someone who has committed lesser crimes than the government theorizes, or worse, has done nothing wrong at all? These victims of the government must either lie to stay out of prison, or risk their freedom in a rigged game they can’t win.  This type of unjust government overreach isn’t just occasional: it is the norm.  It was used to convict me and possibly also Martoma.

As we learned at Martoma’s trial, the only reason the Feds went after him was to get him to cooperate against his billionaire boss, Steven Cohen. When the FBI approached me in May of 2010 they made it clear that it was not me, but my superiors they were interested in. They wanted me to wear a wire to help incriminate the guys who ran my company and in exchange I could have gotten probation.  If I had been guilty or if I had had any reason whatsoever to suspect my bosses of wrongdoing, I would have been happy for this opportunity to stay with my family. The only problem was that I hadn’t seen any crimes at my company and decided I didn’t want to help the Feds ruin more innocent people’s lives. I chose not to lie about my involvement and others but was convicted largely due to the testimony of those who chose the other path.

If you don’t believe me, simply check out the public trial transcripts for yourself.  At my trial, government cooperators lied repeatedly and my lawyer demonstrated this to the jury. A guy who worked with me actually “forgot” his cell phone number (even its area code) in order to keep us from proving his lie about a call that never took place. A consultant testifying against me said I recruited him even though he signed on before I even began at the company. Another consultant presenting detailed testimony of my wrongdoing actually didn’t even know who I was before his arrest, and we played a telephone call for the jury where he said just that. Despite the lies, the jury decided to convict me. And those who testified against me, even those who clearly broke the law in the worst of ways, were given probation or immunity.

I have a lot in common with Martoma but there are some considerable differences. Martoma made millions, while my salary never approached anything close to seven figures. I paid for my own defense, which wiped us out financially while Martoma’s team of high-priced lawyers was paid for by SAC. Martoma was found guilty of using inside information to make huge profits for himself and his firm. I was rung up on conspiracy charges. The government said that I helped connect investors with people at my company who fed them inside information but there were no profits directly linked to my involvement. Our clients did thousands of calls a year with consultants.  The FBI recorded all the calls for six months and found that inside information was being exchanged on less than 1% of these calls. I usually didn’t even set up these calls and never participated in them. However the Feds said I knew about these few calls where consultants were giving out inside information. I didn’t. I decided to fight, knowing it would be a difficult battle but one I now understand to be a dirty game that is impossible to win. No defendant has won a criminal insider trading case in New York in over twenty years.

The question everyone wants to know is why did Martoma go to trial? Why didn’t he turn on Cohen and accept the government’s help in maintaining his freedom? Why would a father of three young children take this enormous risk when he simply could have gotten a deal?

Martoma’s lawyers did a great job of discrediting the 80-year-old doctor who testified in exchange for a sweetheart, non-prosecutorial deal with the government. The doctor admitted to holes in his memory regarding his meetings with Martoma from eight years prior but remarkably was able to recall the most damning testimony in the weeks leading up to the trial. Martoma’s multi-million-dollar defense team not only discredited the government’s star witness but used a securities expert to prove the information provided by the doctor had been made publicly available months before. Why did Martoma go to trial? For the same reason I did. I think he believed he could win.

I consider myself lucky. I was sentenced to 30 months in prison. I met guys in prison serving five or ten years on similar conspiracy charges. The Fed’s war on insider trading is nothing but a publicity stunt to win public approval after their failure to catch the real crooks behind the crimes that brought about the Great Recession. Bharara will run for office. Several of the prosecutors have already left for lucrative jobs with marquee firms as criminal defense attorneys. These are the real “wins”. Meanwhile, the losses are piled much higher in broken marriages and homes without fathers. 
James Fleishman is an author, public speaker 
and advocate for criminal justice rights, especially 
as they relate to persons accused of 
white collar crimes and their families. 
His book, Inside Story, is compelling.
Kindle edition available on Amazon.
Walt Pavlo’s Forbes column about
James Fleishman is worth reading. 
Progressive Prison Project/
Innocent Spouse & Children Project

Rev. Jeff Grant, JD, M Div, Director
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