o'reilly and vulcan. three winners. tonight, on "closing bell," how they make money in a time of obamacare. >> see you on "nightly business report". >> yes. >> you're a busy guy. >> i am. >> thanks for spending time with me. >> that's it for "power lunch." >> "street signs," coming up right now. it is 2:00 p.m. on wall street and dude, where's my sell-off? dow having its best day of the year up by 138 points. do you know what it really wants to do today? close up 1% or more. we're not quite there yet, but, of course, still have a couple hours to go. indeed, not able to do this all year to be able to close up by 1% or more on the dow. the buzzkill though. still on pace for a third straight week of losses on the dow and the fourth straight week of losses for the s&p 500. brian? >> we all want stuff, right, mandy?

i want a pony and unicorn. three big stock stories out there today. one, will the coca-cola green coffee deal mean you may never by soda again at the store? two, hash tag trouble. what's plaguing twitter. and stock down most of the morning of gm. it is positive. what's changed? hard to believe. we'll hit all theser tos s we'll hit all theser tos tories the next few minutes. and make coca-cola at home. sarah innes at the new york stock exchange, why is this buy into coffee roasters a potential game chinger for soda? >> glad you started with financials. people are excited. coke's big et deal since 2010 and has a lot of implications for the industry at large. first, look at the two companies involved. green mountain coffee roasters, and coca-cola. getting together on this keurig

idea. resoundingly, very positive for green mountain. no question about it. gets them into a whole new product category. huge endorsement financially and in principle from coca-cola, one of the world's most power. it brands, and saying it's positive for coca-cola here, because it allows for them to get into a new revenue stream, a new product. more technology, more innovation. keep in mind, soft drink sales especially in north america have been declining for the last nine years. this adds a little bit of enthusiasm to the industry, and then there's the consumer, brian. as you know, this is a whole new way of considering drinking. it's not just soda. not just carbonated beverages. also minute maid and coke's other big products. the ceo on the call last night called it a game changer. the question mark comes when you talk about the bottlers. what does it mean for the coke bottlers? increasingly been active with coca-cola. coca-cola has taken an increased

stake in the bottlers and control. it's going to be complementary but don't know the details what that means for them and the competitors, of course, the soda streams, pepsico. pepsico, by the way, no comment. soda stream, spinning in a positive way, at least for them. it shows there's a lot of excitement and opportunity in the industry. >> yes. the validation may be for soda stream's model coming from the deal ironically. thank you. and jeff from beverage world magazine. jeff, an interesting and maybe game-changing deal. what's your take on this partnership? >> i think the first thought that i had, it speaks to an over arching consumer trend, not just in beverages but everywhere. that's customization. think about the age we're living in. it's the age of youtube, spotify, pandora, people customize their music. they customize their videos and they're customizing their beverages as well. soda stream is a big part of

that and coca-cola playing in this area before with their freestyle machine, which is a fountain vending machine where you can mix and match pretty much every coca-cola product. >> right. >> into hundreds and hundreds of combinations and customize your own beverage. >> get your name on the can. right. customization, if that's the way forward, what about pepsi? left out in the cold? >> not necessarily. no. pepsi 2 has been getting in as well. they, too have a similar device to the, to the -- the freestyle nash i mentioned. and i wouldn't be surprised if we start seeing some partnerships down the road similar to this one. >> partnerships with who? >> maybe why soda stream is -- you think that's possible? pure speculation. is that possible? >> i think there have been speculation on that, not too long ago, and it was pretty much shot down. i want to say it was about a year ago, there was talk about that. i don't think it was any

high-level talk. analyst rumors and that sort of thing. that doesn't look like it's going to happen. i really don't know who that would be if they were to get into such a partnership. i don't have any information on that. but it would be interesting to see how they respond to this. and how soon they respond to this, if at all, as brian said, soda stream up by 10% today. jeff, thank for your thoughts. the next big story the day is twitter. it has been a very rough 20 hours for twitter. the stock is down 20% on disappointing earnings. actually it's worst day on record that only goes back to an ipo november of last year. julia boorstin, what was the most troubling headline from twitter? >> mandy, here's the thing. twitter's earnings and revenue both beat expectations. the concern here the reason why the stock is taking all comes down to the user numbers. twitter only added 9 million new users since its ipo in november through the end of 2013, and the real issue there is not very

many, considering twitter's growth is slowing. twitter's growth in terms of users in the fourth quarter was slower than each of the prior three quarters. so this is a bad trend, and also another concerning trend, which is the number of page views. sort of, it's a measure of the amount of times people basically refresh their twitter page. down 7% from the third quarter to the fourth quarter of last year. this is obviously something that's really going to be a problem if twit hear these grand plans for expansion, but it's something also the ceo talked about a lot on tearnings call yesterday outlining a plan to make twitter more accessible, more engaging, more video. making it easier to have private conversations. also to organize content around toings like news or sports or entertainment. you can sign on to twitter and just browse. but, mandy, it all comes down to the user. >> indeed it does. we simply need make twitter a

better twitter. and bringing in from our content partner. how does he make twittery better twitter in light of nushs dropping? >> i don't think he knows. >> if he knew, he's do it. it's manny being manny. twitter being twitter. >> threw out a bunch of ideas yesterday. they've known it a while. a year ago he thought at 400 million users by the end of 2013. obviously, things weren't going the way he wanted them to go. he's sort of hedging bets too, bought a company moped, advertise on other people's property. that's a hedge there. but they've been trying to figure it out for a while. have a new product head. they got rid of their old product head the end of last year and trying to scratch their heads and figure it out. twitter, like me, spends a lot of time. it you're a regular human being, it's confusing. >> how do they fix that, peter? listen, i had the other day, two weeks ago, four new followers in one day. all had the same avatar.

all fake. right? this is a major problem for twitter. these anonymous fake user. either inactive or purely, literally made up. >> i think they said, look, there is a spam problem, something less than 5%. you might argue it's higher. facebook has a similar number. you could argue a lot of the wen has a spam problem. i don't think that's the real problem. i think the problem is if you come to twitter, a regular human being, look at it the first time, doesn't make a lot of sense. sign up, play with it, you don't know what to do. if we got you to sign up, how can we make it so you stick around, easier to digest? >> leave it there. thank you for your comments on twitter, peter. finally, the third big story of the day, general motors. a big earnings miss for gm. the stock was down much of the morning but now it is turned positive. up 1.5%. phil lebeau, we meet again. a long day for both of us. what's changesed in the past 90 minutes to change investors' minds on gm? >> the conference call went a long ways towards reassuring

analysts on wall street general motors is not falling off a cliff. the plan remains in place when it comes to restructuring in europe and turning things profitable over there. europe is a big focus for some. we talked about it on "squawk box." what's changing in jurpeurope? keep in mind, losses ofs 3 $$34 million, and $50 million entire year, down about 50% compared to 2012. so when you look at those losses, yes, it's a 14th straight year of losses but they have dropped considerably. also, keep in mind, gm will close a plant in germany this year. they still have restructuring costs but expect to see the benefits of that closure, the job reductions. they expect that to kick in and that's why when you look at shares of gm today, a lot of people are saying, okay. maybe the headline was overblown in terms of people selling it off. >> phil, didn't mean to jump in

we have breaking news. headline? >> our own kate kelly at the courthouse in new york. again, we reached a verdict in the case, the insider trading trial against former sac capital trader matthew martoma. remember, he are awaiting that decision to come down. those details. remember, three counts in this particular trial. one, conspiracy toy commit securities fraud. two, securities fraud involving elon stock and count three, securities fraud involving wyatt stock as well. those three counts, those charges. they've reached a verdict. the jury has. details as they become available. for right now, matthew march tomarch -- martoma. jury reached a verdict. three counts. those decisions as soon as they become available. back to you. >> this is a big deal, dom. thank you very much. listen, could be any amount of time. generally fairly quick. although it could be some time.

a big dheel could set a precedent for insider trading cases for years to come if no the longer than that. >> waiting noor. next up, what happened to the sell-off? is everything fine or could we just be sitting in the eye of the storm? we'll debate that with our market mavens. later, did amazon.com just quietly make its first move into bringing tv directly to your home? the deal nobody else seems to be talking about, but we are. it's coming up. ♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.

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as we mentioned at the top of the program, we are in market alert mode. on the positive side, though. courtney reagan at the new york stock exchange. what's happening now? >> mandy, seeing strength here in equities. look at the s&p zp 500. making an attempt to close today higher. looks like we will after trying a couple days and tried. in europe, emerging market stability better than expected day tat economic points. preparing positions ahead of the jobs report tomorrow, which could be good news either way. good, it's good. bad, probably the weather anyways. look at the sectors seeing most of the sectors higher except for telecom. only one pulling things down a little bp risk on rally today. discretionary leading the way. better than expected retail reports. surprising out of limited brands, costco, even kohl's reporting slightly positive holiday sales number, again, something that we did not exactly anticipate. strength in building product materials.

earnings pushing that a little higher. so all in all, a strong day across the board. mandy and brian, back to you. >> all right. cordny reagan, thank you very much. just a reminder folks. waiting on the insider trading verdict from the jury trial of matthew martoma, former trader at sac capital. the jury reach add verdict in their second day of deliberations. martoma's primary defense, the information was already public. this is a big ruling, folks. the moment it comes down we'll bring it to you and give you analysis as well. for now, try to make money, the legal way. shall we? raymond james, jeff and with us portfolio funds michael. great to see you on set, by the way. >> thanks for having me. always fun. >> fantastic. talk about these tips public, a national program and online sirius. give us your take. interest be about this year, triple digits gains and losses. volatility was up. volume up. sort of the fear gauge was up. all of a sudden yesterday it just stopped. what's happened? >> yeah.

and today is trading more like we expected on december 31st. i think what's happened is you had a hangover effect where people maybe delayed into the new year for tax reasons selling some stocks. the bad payroll number in early january. volatility, uncertainty in emerging market currencies and the impact of that on emerging market economies, and how that will impact u.s. economy ultimately. investors are die jegesting tha. interest rates moved down from there and whether that's a trend or a trade? so i think we're all watching and waiting and trying to, see where we'll go next. >> a lot of concerns you mentioned, not necessarily gone away. jeff, are we just in the eye of the storm? the calm spot before it all starts over again? >> it looks to me like mandy, they'll break the s&p. whoever "they" are, out above 1772. the rumors around the trade dex, a 300 number and the 6.5% print

on the unemployment number. whether that's true or not, that's the rumor driving stocks today. >> 6.5. what would that trigger for the fed then? >> it probably means they stay the course on tapering. it's possible because you had roughly 1.3, 1.4 million people that dropped off the welfare rolls and may stop looking for jobs. conceivable you could get a print like that. >> so, jeff, give us opportunities out there in this market, by the way? >> well, i continue to think we're in a secular market. a move up and blowoff into above 1,800. peekaboo look, a basing process. we're in a secular bull market, years to run. i like most sectors out there. in a low growth environment. the growth stocks clustered in technology and health care. those two sectors are trading more than one standard deviation beloaned historic median

valuations. in technology's case, 22% roe versus the s&p 15. >> are you advocating a similar strategy or something else? >> similar strategies in the equity market. i agree. haven't had a tengchnical correction. consolidation of basing before a higher run is definitely reasonable. especially if the economic stick statistics are stronger, em ploim stronger, expect better numbers. >> what if it's weaker? >> interesting. fed is vague how they'll treat interest rates. specific with respect to ending the bond buys but vague about interest rates. i don't think going anywhere soon regardless of the number tomorrow. >> and jeff, the possibility of a 40% correction. do you they is just lunacy or is there any possibility in a scenario that you see? >> the markets can do anything, mandy. i've learned that over 43 years in this business, but 1,100 on

the s&p, about 9 earnings multiple, bottom up estimates by s&p are anywhere near the mark. you are going to get softening data because the weather and precipitation you've seen north of virginia. but i continue to think the economy is stronger than the surface figure shows and i think we'll tag 3% on gdp growth this year. >> agree? >> a little more optimistic than i am. hopefully he's right. >> sorry about this. dominic chu has breaking news on the matthew martoma case. >> what we have, are the jury reached a verdict. watching the wires we know matthew martoma found guilty of insider trading. remember, there are three counts that are involved in this particular case against matthew martoma. one of them was conspiracy toy commit securities fraud. count two, security fraud involving common stock at elan. count three, common stock of

wyeth and its trading. for each of these particular counts, maximum sentences you could see. again, later on down the line. just to frame the discussion. he face as maximum penalty of five years in prison for the conspiracy charge, and 20 years in prison maximum for each one of the insider trading charges. there's also a fine associated with it up to $250,000 or twice the gross gain or loss avoided for the crimes for, in terms of the conspiracy around also a fine of $5 million maximum or twice the gain or loss avoided from those charges on insider trading. for right now, again, reuters is reporting that matthew martoma found guilty on all charges involving this insider trading case. that's three cases again him, brian, mandy. back to you. >> seven women, five men, guys. verdict coming down on the second day here. interesting. primary defense, by the way, mr. martoma and an 83-year-old

doctor conducting some of the trials for elan, the company wyeth and elan sold stocks base and the insider trading news we know wasn't public. this was public information, they're arguing. the laws in insider trading, i don't want to get in weeds here, tend to be very murky. if i tell you something, okay, and i know it and you know what i do and know that this is insider information, trade on it, you're guilty. if michael is sitting at another table and doesn't know who the heck i am or what i'm doing and over here is hitting trades on it, it's probably not illegal. insider trainee, privty. you have to have that relationship of trust and material non-public information. obviously the jury here, not believing matthew martoma's and the doctor the story this was already out in the public domain. nothing to do with this whatsoever, but this is a major case on wall street. sac, the first call when it comes to hedge funds. at one point 8% of new york stock exchange volume.

what's your take on this case? >> we don't use the expert networks. we're not heavy trading. we're long turnover vesting. the sources raised here aren't apoliticable. it's murky, sketchy. a facts and circumstance situation all the way around. the watch word as a manager, be careful, selective, go with your gut and know when to stay away from certain situations, and if you happen to fall upon information, don't trade it. just be safe. >> what do you think, jeff? thoughts on this? >> yeah. it's really sad that a few bad apples give our whole industry a bad impression among the individual investing in public. i think it's tragic. >> basically, in case our listeners and viewers are just joining us, the news, matthew martoma, sac, found guilty on all three charges essentially insider trading having to do with the 2008 drug trial basically disappointing drug

data between pharmaceuticals and wyeth. met with a doctor. for some reason the doctor gave him this information which he acted on, the drug trial was disappointing and they sold their entire position and some some cases shorted the names, too. they not only avoided a huge loss they gained a big profit because of the short there as well. they argue that the information was indeed public. obviously, the jury simply did not believe that as well. the doctor, by the way, involved, was a professor at the new york state university of medicine. i mean, listen, there's a lot of -- out in ann arbor, michigan. excuse me. he's 83 years old at the tile. a lot of questions why indeed the doctor would give him this information. >> in fact, we've got kate kelly. she's been in the courtroom, she'll join us shortly with more detail, but in the meantime, dominic chu, broke the news here on cnbc. give us what you know that we have not already given to our viewers. >> it's interesting.

obvious obviously, with know the circumstances which stocks were involved. kate kelly will be out shortly with her analysis on this whole situation. interesting about this to me is u.s. attorney bharara. a man part of the delivering alpha conference here at cnbc. man the u.s. attorney for the southern district of new york pb u.s. attorney, now undefeated in insider trading cases against defendants. when they bring cases against those people who they have enough evidence to actually try to go after for insider trading, ba h bharara has not lost one, in what i know. >> okay. >> before we go to break, this case has been really going on a decade against sac capital. this is i believe the eighth conviction. seventh orsattith conviction or insider trading. sac capital itself pleaded guilty to insider trading paid a $1.2 million fine back in november. this is part of a decade-long investigation, and guys, this

supersedes wall street. not a wonky hedge fund story. the courtroom, kate kelly will tell you, has been so crowded, that it's been overflowing to capacity. there's a lot of people watching this case. not only because stephen a. cone, the man the firm is named after, sac capital, such an outsized fig multibillionaire, one of the biggest art collectors in the world, has a hockey rink inside of hi home in connecticut, all this stuff, because this could change the way hedge funds in case doss business with what michael said, the expert networks, you basically pay people to give you information. not illegal. generally? right? hey, you're a doctor. what do you think about this? >> information sometimes flows. you hear stuff you don't want positive hear and, i don't want to hear that and just do not trade it. you've got to have that gutened stay away from it. it's easy, our strategy is long term. >> there you go. thanks to you. kate kelley join us on the other side of the break when she comes out of the courtroom. of course, more details on this. do not go away. at's not much, yk

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highs of the day, dow up. the best day of the dow having so far this year. trying to close up 1% or more to

see which would be the first time in 2014. brian? >> good day, despite the news that just broke coming out of the federal courthouse in new york city. that former sac capital in trader matthew martoma was kwishgted of insider trading. three separate charges here, really. conspiracy toy commit securities fraud. securities fraud and securities fraud related to non-public information. kate kelsey at it's courthouse. getting ready. not quite ready yet but on the story. the timeline goes like this, elan and wyeth working on drug trial. matthew martoma, trader in question, engaged in expert network. put him in touch with an 82, 83-year-old doctor in michigan. he flew out there. the doctor gave him material, non-public information about the drub trial data disappointed. a $700 million in addition elan and wyeth. next day, picks up the phone, martoma, calls his boss of sac.

called the man himself. they sold the position, avoided huge losses. kate kelly, ah, i summed it up as quickly as i could. you've been working on it a lot longer, certainly. give us the mood, feeling inside the courtroom and the reaction, please? >> reporter: of course, a very, very tense verdict reading, brian. you can imagine the sort of tense nerves in there. rosemary martoma standing really upright, hands clasped fighting back tears unsuccessfully in the end. matthew martoma, engaged as throughout the trial sitting back in this chair, taking it all in as the guilty counts were read. the jury eager to finish their work. the forewoman of the jury said guilty before the judge asked her. you could see this wasn't ap pleasant thing to deliver for anybody. the hearing itself was relatively short. the judge thanked the jurors for their service, shook their hands. talked briefly about some posttrial motions that need to be made, but the entire affair lasted only about five minutes. this is obviously a huge blow to

the martomas, also to sac. they would have liked to see, i think, an acquittal in this case. particularly because it hit so close to home for sac founder stephen cohen. he came up numerous times in this trial. said on more than one occasion matthew martoma and the others involved were just people that came up in the process of the government targeting's stephen cone individually. a case they haven't yet been able to make, brian and mandy. so we may see that there's more to come in this investigative work. the u.s. attorney here has had a pretty much perfect record in terms of these insider trading cases. >> we understand mr. martoma faces as many as 20 years in prison on each of the two counts of conspiracy. ultimately the sentence could be significantly lower than that? >> reporter: that's right, mandy. the combined possible total here is 45 years. you've got five years as you said for the conspiracy. then two individual counts of securities fraud. one for each stock involved.

a combined 45. in cases like this, seeing a lot less ten. as much as ten years. low teens, probably not more's in other cases between five and ten, and not nearly as bad as the maximum sentence. in any kay, very tough -- it's very tough news for parents of three young children and professionals and so i'm sure this will have a big impact on them and perhaps a deterrent impact as well. >> yeah. listen, there's no good news here. like you said. they are family people. they've got three young kids. this is a terrible situation for the family. that said, kate i mean, the reality is, the federal government has been going after sac and its employees for a while. this i believe, correct me if i'm wrong, the seventh insider trading either case or sort of verdict or deal with sac employees. sac itself a $1.2 billion fine. hard for people to not look at

sac and what they see as the remnants and say maybe the federal government had been right for a long time? >> reporter: no doubt that sac is fighting that sort of reputational risk as we speak. as a matter of fact, as we speak they're in the process of returning all of their outside money to investors and a few ill liquid, non-stock holdings they will take longer to get out of. by and large, cease to have outside investors by the end of this quarter. behind me, the defendant, his family and lawyers emerging. we'll fry to get shots of that and get back to you, i also want to bring up, kate, the fact you mentioned a moment ago about this potentially being a deterrent. >> by the way, sorry, mandy. that's matthew martoma in the front. four people walking -- that's him holding hands with his wife. his attorneys. >> oh, okay. a little scuffle going on. >> there's a fight. there's a fight. >> it looks like there's a fight breaking out right in front of the defendant's car. i see richard straussberg trying

to intervene. looks like whatever was going on has been quieted. >> they wanted to get in the car. wanted to get in the car. whoever wa was with the earmuffs and other press in the way. there was a surf. >> it looks as though the p.r. person for matthew martoma having words with someone. you can see sort of, wild gesticulations there. crowd might be disbursing a little. quite a few reporters in the presume multiple people from the "wall street journal," "new yorker" quite a large press turnout for this trial. much more so than for the michael steinberg try occurred before the end of the year. >> the other trade. right? >> and that is because it's so closely watched. obviously going to set a precedent for future cases. back to your comment about this being hopefully a deterrent to future bad behavior. to what degree? you follow these cases a lot. kate is it a deterrent? to what degree?

is a harsh sentence a deterrent. >> reporter: it will have that impact. particularly this venue. the southern district of manhattan. a u.s. attorney who since 2009 alone i believe these figures are correct has had 77 victories in insider trading cases. a perfect record. there are some pending cases that have not been resolved but he's not yet lost one. none of these individuals has been acquitted. either pled out or been convicted. in this venue particularly, the department of justice, tough on insider trading. in fact, sometimes to their criticism. some peel with all the talent in this office, they should have pursued cases more related to the financial crisis, for example, as opposed to insider trading. put a lot of fire power here and it clearly has been successful. >> not just them, by the way. the last three year, the securities and exchange commission filed more insider trading cases than any three-year period in its history. 131 last year alone. kate kelly, thank you. stick around, by the way. let's go now to dom chu.

>> kate kelly sitting outside the courthouse. again, u.s. attorney bharara issued this statement, brian, mandy. as the jury unanimously found, matthew marmartoma, used it to engage in illegal insider trading." he goz ton say in the statement, in the short hundred cheating may have been profitable for martoma, but in the end, it made him a convicted felon and likely will result in the forfeiture of his illegal windfall and loss of his -- the ninth person convicted by guilty plea in this district in the last four years. again, speaking to what kate kelly just said. a perfect record for u.s. attorney preet bharara's office when it comes to convicting those he goes after in insider trading, guys. >> thank you very much for the statement there from the sheriff

of wall street, preet bharara. background here. doing reading on how things went down. according to court documents, when the federal agents arrived at matthew ma tomea's home back in 2001 he apparently fainted. i think a lot of people would do. and prosecutors made sort of overtures towards him to solicit cooperation in this matter that might have afford him leniency. he apartmeopted to go to trial. >> reporter: i want to mention -- >> a quick picture of this man? matthew martoma is not his name. his nach is -- >> glad you brought that up. >> basically -- for viewers and listening that don't know, expelled from harvard law school for conspireing to change his bs to as. when they investigated him reportedly created a fake computer forensics company to then say, look, harvard, no. i did not go into -- he changed his name. got accepted to stamford,

graduated with an mba. matthew martoma is not his real name regard shocking back story. weren't of the big questions during this trial was whether these facts would be introduced at trial. ultimately they were not. yes, matthew martoma, a successful harvard law school student applied ironically for clerkships to a number of judges around the country. was in the process of going through those interviews and selection processes and actually was on the verge of being offered a job by a judge, but falsified his harvard law school transcript. falsified it to make his grades look lightly better. irony, getting b pluses, a minuses and wanted them up a notch to the a minus or a level when he was ultimately caught. he said it was a joke. something he had done just to please his parents, very hard driving and demanding. and wanted to show a better effort for them and also went through the motions of cancels hi interview processes. his applications for these federal clerkships, but was discovered to have done this and the judges received false

transcripts in cases and a whole administrative proceeding at harvard resulted in him being expelled. as you said. he and other family members changed their last name to martoma. not all that happened after the harvard situation, but his personal name change did. >> certainly helps paint a better picture of the person we're talking about. matthew martoma, known now. kate kelly, back to you in a moment's time. don't go anywhere. at the moment the dow up by over 1%. if it can close above that, the first time this year. don't go away. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

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all right. bring in securities greg szymanski by phone. pleasure to have you on. your take on this ruling? >> an extraordinary victory for the u.s. government. they showed that insider trading is illegal, and has to be addressed. i think it sends a tremendous signal that they're going to go after steve cohen next. they've gotten everybody. this is the guy that they've been after since the beginning. you can't get away with insider trading. it's a real crime, and if you're convicted like martoma, you're going to do the time. >> talking of doing the time,

what sentence do you think would be an appropriate sentence in a situation like this, and harsh enough to be able to, as we discussed earlier, deter further insider trading? >> i think he's going to get north of ten years in prison. probably as high as 15 or 20. this is the largest insider trading. it's $276 million, pales in comparison to what sam waksal did who got seven years with the martha stewart imimclone case. >> and what about the possibility of five years. if it's only ten, that's significantly lower. why so much lower? >> i don't know it will be lower. i could see it going as high as -- as 15, 20 years in prison. maybe as high as 25. that's up to the judge. there are sendensing guidelines but this is at the top range of

things. >> because of the dollar values -- he could serve it concurrently. you're right. at the top range, because the dollar value involved. sec, 103 cases last year. jake, you've worked for the ftc, worked for -- do you believe that we have finally reached a point where people are going to be afraid to commit financial crimes? right? what we've seen is slaps on the wrist. right? nobody doing the perp walk. maybe fines. do you think we finally got to the point where people are going say, you know what? better not do it. i might end up in an orange jumpsuit? >> one more guy to get. steve cohen. they've gotten steinberg raj is in jail. it they get cohen the message is out there. people are seeing it. this is going to send shock waves. one more foish get, that's the big fish. >> the guy we're showing, steve

cohen. do you think they'll continue to go after him, jake? >> they have to. i think to show credibility, this is the guy at the top of the organization. this is the one that made this particular trade, and the others. they have to go after steve cohen, and i think they will. >> have they got enough to go after him, to the degree they would like to? >> look, there's a lot of circle evidence, but it's possible martoma may show up and talk about what happened on that 20-minute phone call. i think they have enough and i think he'll be convicted if he goes to trial. >> jake, thank you for joining us on short notice. always good to get your incite. >> my pleasure. matthew martoma coming out of the courthouse. no sound atafred. the reason, there was adult language we going to edit out soon as we can, by the way. simply don't want to put that on the network. matthew martoma and his wife getting into the car. you see a scuff's breaks out.

the defense attorney for more tomea martoma, with the camel skin coat. and a p.r. member for martoma, pushing and shoving going on. soon as we get the audio up and can edit out the adult conseten. being new york, a heated time. some adult language. we'll get if to you. another quick break on "street signs." do not go away. the market is putting in a good rally today. as we say, maybe the eye of the storm, or maybe the end of the storm, but kernt currently the up by over 1%. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts.

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one of the biggest insider trading cases in american history is over with three guilty counts against matthew martoma, former insider trader at sac capital advisers. two days of deliberation, really a day and a half with a jury. three guilty counts. kate kelly at the courthouse in manhattan rejoining us with a yapup. we saw it got heated there. give us a view inside the --s courthouse, because these are normally sort of boring, a

couple people in the audience, family members. not this one. right ask this was heated from the beginning? >> reporter: this was absolutely heated from the beginning, and one thing i was thinking which you were talking to jake szymanski, probably ultimately a sweet unblemished record and have done very well with these cases. there was a particularly long jury deliberation. i notice that when the jurors were filing back in to give us the verdict, rosemary martoma sitting very stiff upright with her hands clasped, awaiting the news. so was the lead assistant u.s. attorney on this case. he looked very nervous as well. late yesterday the jury had asked for some testimony they wanted to review that looked to be favorable to the defense. then today we figured what happened was anyone's guess based on that. so i do think it was tense. i think there was a lot of media attention, more so than when the recent mike steinberg trial, another s.a.c. person who was charged with insider trading and ultimately convicted. so a very tense, electric sort of courtroom today. you saw that play out with that

scuffle afterwards as well. >> kate kelly, great reporting. thank you very much. it's not the only big story of the day. we're also following the big rally on wall street. the dow having its best day of the year so far. disney is only about a buck away from its all-time high. it's the biggest gainer. we're going to talk more about the markets and how you play them when we come back. we know we're not the center of your life, but we'll do our best to help you connect to what is.

let's take a look at how the markets are doing at this stage. the dow is up by about 164 points. there are only three stocks that are in the red right now. disney by far is the biggest gainer. it's up by over 5%. it's all-time high is above 76. so it's not so far away. bit of a buzz kill, though. still the dow is on pace for its third straight week of losses. i think the s&p is on pace for its fourth straight week of losses, today notwithstanding. >> let's bring in harvey pitt. great to chat with you again. your reaction to this verdict? i would imagine you are not surprised. the case seemed pretty solid. >> i thought the case was almost the equivalent of a slam dunk. this continues a very impressive

record of prosecutions by the southern district. >> what are the implications here in terms of what happens next with steve cohen? >> well, i think as far as mr. cohen's concerned, there are two aspects. first, a lot of the damage that could be inflicted on him has already been inflicted. he can no longer manage public money, but in terms of his proceeding with the s.e.c. for failure to supervise, this adds another nail into the coffin. there have been stories suggesting that they are negotiating, and in my view, i think this is really the end of the s.a.c. saga as a public enterprise. it sends out a message, however, to all hedge fund operators about the need to be wary of lax

supervision. that, i think, is the most critical message for those who haven't been tainted by any of this. >> martoma's the eighth person who worked for s.a.c. to either be convicted or plead guilty. do you believe they will not stop until cohen is convicted of something? >> i think that they very well could go after him. the question is at this point, does it add anything from the government's perspective? certainly now the question is not whether he turned a blind eye or even may have facilitated or encouraged this, but can he himself be said to have been

guilty of insider trading. that's always been the issue for him. it will depend on what his knowledge was and so on. >> okay. mr. pitt, thank you very much for your commentary there. taking a very quick break. "street signs" is coming back after this quick break.

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will be the first time this year. only losers, at&t, verizon, and walmart right now. >> i'm sure "closing bell" will have much more on the insider trading conviction of matthew martoma. "the closing bell" begins right now. and welcome to "the closing bell." i'm kelly evans at the new york stock exchange, where traders are hoping the dow can hold these pretty big gains in this final hour, bill. >> so far the best day of the year for the bulls. i'm bill griffith here at cnbc headquarters. i'm not "nightly business report" later tonight. big plug there. that 300-point down day of monday seems like long ago, kelly. we have today positive jobs numbers, the jobless benefits claims were less than expected. and that brought out hope that maybe tomorrow's big jobs report will bring us better news than it did last month. >> big moves in the