Mathew Martoma, a former portfolio manager at billionaire Steven A. Cohen's SAC Capital Advisors hedge fund, was found guilty on Thursday of engaging in what prosecutors called the most lucrative insider trading scheme in U.S. history.

A federal jury in New York found Martoma guilty on all three of the conspiracy and securities fraud charges that he faced, over a scheme that allowed SAC Capital to make profits and avoid losses of $275 million.

The verdict was the eighth insider trading conviction of a current or former employee at SAC Capital, a $14 billion hedge fund that has long been in the cross-hairs of the FBI and Preet Bharara, the U.S. Attorney in Manhattan.

Martoma gave no apparent reaction as the verdict was read. His wife, Rosemary, sat up in her seat in court as the verdict was read, with tears going down her face. They exited the court holding hands.

As news photographers snapped pictures, Martoma walked stone-faced out of the courthouse and into a waiting SUV with his wife and defense team. They did not speak to reporters.

"We are very disappointed and we plan to appeal," Richard Strassberg, Martoma's lawyer, said through a spokesman.

U.S. District Judge Paul Gardephe did not immediately set a sentencing date. Martoma, 39, could face a maximum 45 years in prison, although the highest sentence to date in an insider trading case is 12 years.

The verdict came after a different jury in the same courthouse in December convicted Michael Steinberg, a portfolio manager at SAC Capital, on five conspiracy and securities fraud counts for his role in a separate insider trading scheme.

SAC Capital last year agreed to pay $1.8 billion in criminal and civil settlements and plead guilty to fraud charges stemming from insider trading by its employees.

The U.S. Securities and Exchange Commission is meanwhile seeking to bar Cohen from the financial services industry for failing to supervise Martoma and Steinberg.

The conviction continued an unbroken winning streak at trial for U.S. Attorney Bharara, who has secured guilty pleas or verdicts against 79 individuals since October 2009 as part of a broad crackdown by his office on insider trading on Wall Street.

"This unbroken string of wins for the government in insider trading cases will have huge impact," said Thomas Gorman, a defense lawyer at law firm Dorsey & Whitney. "It's getting widely circulated, so it does have a chilling effect of those in the trading business considering insider trading."

"GRAIN OF SAND"

Martoma, who worked in SAC's CR Intrinsic Investors division, was accused of seeking out confidential information from doctors involved in a clinical trial of an Alzheimer's drug being developed by Elan Corp Plc and Wyeth, now owned by Pfizer Inc.

Based on a tip Martoma received a doctor about negative trial results for the drug, SAC Capital in July 2008 began selling its $700 million position in Elan and Wyeth before the data was made public later that month, prosecutors said.

"Martoma bought the answer sheet before the exam - more than once - netting a quarter billion dollars in profits and losses avoided for SAC, as well as a $9 million bonus for him," Bharara said in a statement.

Martoma chose to go to trial rather than cooperate with prosecutors in their investigation of Cohen. Such cooperation often results in leniency at sentencing.

"The time to cooperate is not after you've been found guilty it's before you go to trial," said C. Evan Stewart, a partner at Cohen & Gresser.

During almost five weeks of trial, prosecutors said that most of the trading took place in accounts controlled by Cohen. They also said that Martoma had a 20-minute phone call with Cohen after receiving information about the negative results.

While Cohen has not been criminally charged, Sidney Gilman, the doctor who tipped Martoma, said at trial than an FBI agent on approaching him the first time had called Martoma a "grain of sand" in what was an investigation of Cohen.

Strassberg, Martoma's lawyer, said during the trial that prosecutors erred in bringing the case "in their haste to make a case against someone who is not even in this courtroom: Mathew Martoma's boss, Steven Cohen.

A representative for SAC Capital declined to comment after the verdict.

TWO DOCTORS

At trial, prosecutors presented testimony of Gilman and another doctor, Joel Ross, who said they provided confidential information to Martoma during paid consultations through firms that connect investors with experts.

Gilman, then a professor at University of Michigan who chaired the drug's safety monitoring committee, had spoken with Martoma during more than 40 paid consultations arranged through expert networking firm Gerson Lehrman Group, earning more than $70,000 in the process, prosecutors said.

Gilman testified that after he was picked to present the drug trial's final results at a Chicago conference, he called Martoma on July 17, 2008, and told him the details.

Martoma two days later came to Michigan and met with him at the doctor's office and reviewed draft slides for the presentation, Gilman said.

Gilman, though, said he did not initially remember the 2008 office meeting when investigators questioned him about it. He only recalled some details as recently as two weeks before he took the stand, adding there were "still remains some holes in my memory.

Both doctors testified pursuant to non-prosecution agreements, a fact the defense sought to use to call into question their credibility. Both doctors had denied giving Martoma confidential information when first confronted by the

FBI.

Martoma's lawyers also sought to provide alternative explanations for the stock sales and contended there was no meaningful difference between the final results and a preview of them described in a June 17, 2008, news release by Elan.

The case is U.S. v. Martoma, U.S. District Court for the Southern District of New York, 12-cr-00973.