Mathew Martoma is the eighth former trader at the billion dollar hedge funders' firm to be found guilty.

By Stephen Gandel
February 6, 2014

FORTUNE — The conviction of former SAC trader Mathew Martoma on Thursday seemingly puts Steven A. Cohen on the hot seat. But even with a guilty verdict against another one of his underlings — Martoma makes eight — Cohen is unlikely to end up behind bars.

Not that Cohen should be celebrating. Preet Bharara, with the Martoma conviction, continues his perfect streak in insider trading cases. Since taking over the U.S. Attorney’s Office for the Southern District of New York, Bharara is 79 for 79 on insider trading cases. And only 18 of those were plea deals. The rest were won at trial.

And that all sounds very impressive, until you consider this: Historically, prosecutors have had a near-perfect record getting convictions in insider trading cases. It’s hard to think of a case that didn’t lead to a conviction. And that’s particularly true for the Southern District of New York, where the conviction record for all cases is well over 90%.

MORE: The winners and losers in the case against SAC

If you know anything about insider trading, this seems like a very odd fact. The laws around insider trading are wishy-washy at best. Nearly all legal experts say it is very hard to define what is insider trading and what is not. And traders think so too, but they might not be an especially objective bunch, particularly those who conduct insider trading.

So if the law is unclear, why is it that prosecutors are able to convince juries their interpretation is correct so much of the time? The answer: While there is not a great definition of insider trading, it’s pretty clear what type of evidence will put you in jail for insider trading. And prosecutors are very good at knowing when they have that type of evidence and when they do not.

That probably means that Bharara and his pals have done the calculus and have decided that there isn’t a winnable criminal case to be made against Cohen, who founded and ran SAC Capital, the multibillion dollar hedge fund that Martoma worked at when he made the trades that got him in trouble. (The Securities and Exchange Commission is still going ahead with a case to bar Cohen from the finance industry. Cohen is already in the process of winding SAC down.) The Martoma conviction is unlikely to change that.

It is possible that Martoma would now agree to testify against Cohen in exchange for a lighter sentence. He faces as much as 45 years behind bars. But that still might not help the case against Cohen. Martoma didn’t testify himself, but he and his lawyers did have a lot of experts testify on his behalf to try to prove that what he did was not insider trading. So it will be hard for him to now flip and say, “I was insider trading, I knew it, and I know that Cohen was doing it too.” Also, now that Martoma is facing lots of jail time, it will be easy for a defense lawyer to raise doubts about his testimony. He is clearly motivated.

Earlier: 5 signs Steven Cohen was trading on insider information

So, either in or out of the finance business, Cohen is likely to remain a free man.

What does all of this mean? One thing for sure: Apparently, our justice system is much better at putting people behind bars for breaking the law trading individual stocks than it is for trading and creating billion-dollar derivative bets that leave millions in foreclosure and our financial system near the brink. Second, even when it comes to individual stock trades, the boss is still safe.

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