"He spent the weekend incarcerated in the special housing unit which, as the court knows, is a particularly harsh form of incarceration," Martin's lawyer, Larry Krantz, wrote in an emotionally-charged letter to US District Judge Andrew Carter. Mr Krantz said despite making bail on Friday, which included $US100,000 cash ($AU95,000), US immigration authorities slapped a "plainly erroneous" detainer on Martin, keeping him at the Manhattan jail until Tuesday when the matter, with the help of prosecutors, was finally resolved. Martin is believed to be staying at an apartment on New York's Upper-West Side. The popular surfer, musician and financial whiz's life took a turn in 2009 when, while living in Manhattan and working at the Royal Bank of Scotland's Connecticut office, a New Zealand banker friend told him about IBM's secret $US1.2 billion planned acquisition of publicly-traded Chicago-based software company SPSS Inc, prosecutors allege. Martin is accused of passing the sensitive information on to his flatmate, Thomas C Conradt, a stockbroker.

Conradt then told his colleague at the Manhattan office of Euro Pacific Capital, David J Weishaus, prosecutors said. Two others, code-named CC-1 and CC-2 by prosecutors, were also allegedly told about the IBM takeover. The five allegedly bought up SPSS stock and, after the acquisition was announced and SPSS stock soared, Martin, Conradt, Weishaus, CC-1 and CC-2, sold their stakes, yielding profits of $US7,900, $US2,538, $US129,290, $US629,954 and $US254,360, respectively, prosecutors allege. We believe that the events that have transpired in connection with Mr Martin's arrest, incarceration and extradition are truly shocking, and that Mr Martin has already endured a harsh and excessive punishment. Martin moved back to Australia, then took up a job in Hong Kong, but just before Christmas last year he was arrested on a warrant from US authorities.

Despite agreeing to be extradited to the US just days later, Martin spent three months in Hong Kong jails, with the first stop the Lai Chi Kok maximum security institution. "There, he was housed, and remained housed for the next nearly three months, in a cell with approximately 90 other inmates, almost none of whom spoke English," Mr Krantz told Judge Carter. "The conditions of his incarceration were abysmal, to say the least." Martin's situation took another unfortunate turn when during an early morning inspection in Lai Chi Kok he failed to say "good morning" to a prison guard, Mr Krantz said. He apologised, but the guards searched his belongings and allegedly found two radios, despite inmates only allowed one radio, and Martin was placed in solitary confinement in a 2.4m by 2.4m cell with a plastic bed.

On his third day of solitary confinement, Mr Krantz said Martin was attempting to do some exercise and tied his jacket around the bars of his cell to use as an exercise aid, but a prison guard thought he was attempting suicide. Despite denying this, Martin was taken to a prison psychiatrist, then handcuffed, placed on a bus, driven to the Sui Lam psychiatric prison and placed in solitary confinement for observation. "After approximately one day, he was let out of solitary confinement and placed in the general population at the psychiatric prison," Mr Krantz wrote. "There, he was held in a cell with approximately 40 other inmates, many of whom were facing charges for serious crimes including murder." After 10 days in Sui Lam he was taken back to Lai Chi Kok, but placed in the prison hospital with terminally ill inmates and prisoners with "severe psychiatric disorders".

It was not until March 28 that three US Marshals and two Interpol officers arrived at the jail and took him to the airport for a 12 hour commercial flight to San Francisco. He spent the flight handcuffed to a Marshal and "to make matters worse, when the plane landed, the pilot announced that there were US Marshals on board accompanying a passenger, and that they would be deplaning first. Mr Martin was then led, in visible handcuffs, in front of all the other passengers". They then boarded a six hour flight to New York, with Martin still in handcuffs, and when they landed FBI agents led Martin through JFK airport in handcuffs, then drove him to Brooklyn's Metropolitan Detention Center (MDC) in handcuffs and leg irons. Last Friday, at the bail hearing in New York, Martin had two friends waiting to take him to the Upper-West Side apartment, but two hours after the judge agreed to the bail terms, Marshals said he could not be released because an immigration detainer was filed against him. He was taken to the Manhattan Correctional Center (MCC). Due to a lack of bed space, Martin was placed in the SHU cell with another inmate where they remained "for almost 24 hours a day" until he was released on Tuesday.

"We believe that the events that have transpired in connection with Mr Martin's arrest, incarceration and extradition are truly shocking, and that Mr Martin has already endured a harsh and excessive punishment," Mr Krantz said. On Wednesday, in a boost to the prosecution case, Conradt entered guilty pleas to conspiracy to commit securities fraud and two counts of securities fraud. At the Good Friday arraignment, Martin entered a not guilty plea to one count of conspiracy to commit securities fraud and one count of securities fraud. If convicted of both charges he faces up to 25 years in prison and more than $US5 million in fines, but Mr Krantz said under sentencing guidelines, if convicted, "Martin's likely recommended sentencing range would be approximately 0-6 months" jail. If Martin agrees to a plea deal or is found guilty, it will most likely be argued that for his alleged gain of just $US7900, his Hong Kong, Brooklyn and Manhattan jail time is enough punishment.

- AAP