Visium Asset Management

{{infobox company

| name = Visium Asset Management LP

| type = Private

| industry = Investment management

| products = Hedge funds

| location = New York City, New York, U.S.

| founded = 2005

| defunct = 2016

| fate = Liquidation

| founder = Jacob Gottlieb

| aum = $8 billion (2016)

| num_employees = 170 (2016)

}}

Visium Asset Management LP was an American multi-strategy hedge fund and private equity firm. It began as a healthcare-focused fund, founded in 2005 by Jacob Gottlieb. In 2016, three of the company's traders were indicted by United States federal authorities for securities fraud. One of the accused employees killed himself days after he was indicted. Visium subsequently liquidated several of its funds and wound down operations.

Business

Visium Asset Management oversaw numerous funds throughout its existence. In 2015, Visium "managed five hedge funds and a mutual fund" while also reportedly trying to raise $500 million in capital for the creation of a private equity fund, according to Bloomberg News.{{cite news |last1=Porzecanski |first1=Katia |last2=Parmar |first2=Hema |title=Visium Asset Management to Fire 33 People as Funds Shutter |url=https://www.bloomberg.com/news/articles/2016-07-19/visium-asset-management-to-fire-33-people-as-it-liquidates-funds |access-date=27 December 2019 |work=Bloomberg News |date=19 July 2016 |language=en-US}} At the company's most successful point in 2016, they had at least $8 billion in assets under management.{{cite news |last1=Foxman |first1=Simone |last2=Porzecanski |first2=Katia |last3=Burton |first3=Katherine |date=20 July 2016 |title=Inside the High-Profile Downfall of a $8 Billion Hedge Fund |url=https://www.bloomberg.com/news/articles/2016-07-20/at-visium-red-flags-presaged-downfall-of-8-billion-hedge-fund |access-date=23 December 2019 |work=Bloomberg News |language=en-US}}{{cite news |last1=Foxman |first1=Simone |last2=Porzecanski |first2=Katia |title=Visium to Shut Four Remaining Hedge Funds as Manager Charged |url=https://www.bloomberg.com/news/articles/2016-06-17/visium-to-wind-down-four-remaining-funds-after-employee-charged |access-date=27 December 2019 |work=Bloomberg News |date=17 June 2016 |language=en-US}}

class="wikitable sortable"
Name !Start !End !Fate ! class="unsortable" \|Notes ! class="unsortable" \|{{abbr\|Ref.\|References}}
{{anchor\|Balanced Fund}} \|{{sort\|Balanced Fund\|Visium Balanced Fund}} \| align="center"\|2005 \| align="center"\|2016 \|{{terminated\|Liquidated}}{{efn\|3–5% of the fund was held back for potential payment of the firm's liabilities.}} \|The firm's flagship healthcare equity fund. It would later serve as a model for Altium Capital. \|
{{anchor\|Global Fund}} \|{{sort\|Global Fund\|Visium Global Fund}} \| align="center"\|2009 \| align="center"\|2016 \|{{dropped\|Sold}} \|Bought by AllianceBernstein. \|
{{anchor\|Institutional Partners Fund}} \|{{sort\|Institutional Partners Fund\|Visium Institutional Partners Fund}} \| align="center"\|2010 \| align="center"\|2016 \|{{terminated\|Liquidated}} \|Large-cap healthcare equity fund. \|{{cite news \|last1=Stevenson \|first1=Alexandra \|title=Visium to Sell and Liquidate Funds After Insider Trading Charges \|url=https://www.nytimes.com/2016/06/18/business/dealbook/visium-to-sell-and-liquidate-funds-after-insider-trading-charges.html \|access-date=27 December 2019 \|work=The New York Times \|date=17 June 2016 \|language=en-US}}
{{anchor\|Equity Alpha Fund}} \|{{sort\|Equity Alpha Fund\|Visium Equity Alpha Fund}} \| align="center"\|2011 \| align="center"\|2016 \|{{terminated\|Liquidated}} \|A diversified United States-focused equity fund with long and short positions. \|
{{anchor\|Equity Alpha UCITS Fund}} \|{{sort\|Equity Alpha UCITS Fund\|Visium Equity Alpha UCITS Fund}} \| align="center"\|2015 \| align="center"\|2016 \|{{terminated\|Liquidated}} \|A diversified United States-focused equity fund with long and short positions. \|{{cite press release \|title=Visium Asset Management Launches Long/Short U.S. Equities UCITS Fund \|url=https://www.businesswire.com/news/home/20150505005216/en/Visium-Asset-Management-Launches-LongShort-U.S.-Equities \|access-date=27 December 2019 \|work=Business Wire \|date=5 May 2015 \|location=New York \|language=en}}
{{anchor\|Credit Opportunities Fund}} \|{{sort\|Credit Opportunities Fund\|Visium Credit Opportunities Fund}} \| align="center"\|2009 \| align="center"\|2013 \|{{terminated\|Liquidated}} \|Investigated in March 2016 over valuation of securities. \|{{cite news \|last1=Stevenson \|first1=Alexandra \|title=Visium Hedge Fund Being Investigated by Justice Dept. and S.E.C. \|url=https://www.nytimes.com/2016/03/08/business/dealbook/visium-being-investigated-by-justice-dept-and-sec.html \|access-date=27 December 2019 \|work=The New York Times \|date=7 March 2016 \|language=en}}{{cite news \|last1=Porzecanski \|first1=Katia \|last2=Burton \|first2=Katherine \|title=Visium Being Probed by U.S. Over Valuation in Credit Fund \|url=https://www.bloomberg.com/news/articles/2016-03-07/visium-to-be-investigated-for-valuation-issues-in-credit-fund \|access-date=27 December 2019 \|work=Bloomberg News \|date=7 March 2016 \|language=en-US}}
{{anchor\|Event Driven Fund}} \|{{sort\|Event Driven Fund\|Visium Event Driven Fund}} \| align="center"\|2013 \| align="center"\|2015 \|{{terminated\|Liquidated}} \|An equity fund with long and short positions focused on Event-Driven investing. \|{{cite press release \|title=Visium Asset Management Launches its First Mutual Fund \|url=https://www.prnewswire.com/news-releases/visium-asset-management-launches-its-first-mutual-fund-220207671.html \|access-date=21 February 2020 \|work=PRNewswire \|date=19 August 2013 \|location=New York \|language=en}}

class="wikitable sortable"

Name

!Start

!End

!Fate

! class="unsortable" |Notes

! class="unsortable" |{{abbr|Ref.|References}}

|{{sort|Balanced Fund|Visium Balanced Fund}}

| align="center"|2005

| align="center"|2016

|{{terminated|Liquidated}}{{efn|3–5% of the fund was held back for potential payment of the firm's liabilities.}}

|The firm's flagship healthcare equity fund. It would later serve as a model for Altium Capital.

|{{sort|Global Fund|Visium Global Fund}}

| align="center"|2009

| align="center"|2016

|{{dropped|Sold}}

|Bought by AllianceBernstein.

|{{sort|Institutional Partners Fund|Visium Institutional Partners Fund}}

| align="center"|2010

| align="center"|2016

|{{terminated|Liquidated}}

|Large-cap healthcare equity fund.

|{{cite news |last1=Stevenson |first1=Alexandra |title=Visium to Sell and Liquidate Funds After Insider Trading Charges |url=https://www.nytimes.com/2016/06/18/business/dealbook/visium-to-sell-and-liquidate-funds-after-insider-trading-charges.html |access-date=27 December 2019 |work=The New York Times |date=17 June 2016 |language=en-US}}

|{{sort|Equity Alpha Fund|Visium Equity Alpha Fund}}

| align="center"|2011

| align="center"|2016

|{{terminated|Liquidated}}

|A diversified United States-focused equity fund with long and short positions.

|{{sort|Equity Alpha UCITS Fund|Visium Equity Alpha UCITS Fund}}

| align="center"|2015

| align="center"|2016

|{{terminated|Liquidated}}

|A diversified United States-focused equity fund with long and short positions.

|{{cite press release |title=Visium Asset Management Launches Long/Short U.S. Equities UCITS Fund |url=https://www.businesswire.com/news/home/20150505005216/en/Visium-Asset-Management-Launches-LongShort-U.S.-Equities |access-date=27 December 2019 |work=Business Wire |date=5 May 2015 |location=New York |language=en}}

|{{sort|Credit Opportunities Fund|Visium Credit Opportunities Fund}}

| align="center"|2009

| align="center"|2013

|{{terminated|Liquidated}}

|Investigated in March 2016 over valuation of securities.

|{{cite news |last1=Stevenson |first1=Alexandra |title=Visium Hedge Fund Being Investigated by Justice Dept. and S.E.C. |url=https://www.nytimes.com/2016/03/08/business/dealbook/visium-being-investigated-by-justice-dept-and-sec.html |access-date=27 December 2019 |work=The New York Times |date=7 March 2016 |language=en}}{{cite news |last1=Porzecanski |first1=Katia |last2=Burton |first2=Katherine |title=Visium Being Probed by U.S. Over Valuation in Credit Fund |url=https://www.bloomberg.com/news/articles/2016-03-07/visium-to-be-investigated-for-valuation-issues-in-credit-fund |access-date=27 December 2019 |work=Bloomberg News |date=7 March 2016 |language=en-US}}

|{{sort|Event Driven Fund|Visium Event Driven Fund}}

| align="center"|2013

| align="center"|2015

|{{terminated|Liquidated}}

|An equity fund with long and short positions focused on Event-Driven investing.

|{{cite press release |title=Visium Asset Management Launches its First Mutual Fund |url=https://www.prnewswire.com/news-releases/visium-asset-management-launches-its-first-mutual-fund-220207671.html |access-date=21 February 2020 |work=PRNewswire |date=19 August 2013 |location=New York |language=en}}

Visium Asset Management started as a family business. Until 2010, Gottlieb's father had a desk within the firm's New York office and, on occasion, informally advised the company on accounting matters. Jacob Gottlieb's brother Mark worked at Visium in various roles, in a move regarded by Bloomberg News as a "potential conflict of interest". Additionally, Bloomberg reported that portfolio manager Stefan Lumiere "was hired in 2007, two years after his sister Alexandra became engaged to [Jacob] Gottlieb."

Despite his public commitment to "the highest ethical conduct [for Visium employees]", Gottlieb directly owned 25,703 pre-IPO shares of Intercept Pharmaceuticals despite the company having 5.2% stake as well. This caused at least one investor complaint, and the company received accusations of double standards from several employees.

Winding down and closure

= Investigation for fraud =

A former trader with the firm, Jason Thorell, told the U.S. Securities and Exchange Commission in 2013, according to Reuters, that "Visium employees routinely sought sham quotes from brokers to justify inflated values for debt securities, and deviated from prices set by third-parties on a magnitude beyond what was usual."{{cite news |last1=Raymond |first1=Nate |title=Ex-Visium trader tells New York jury how he turned whistleblower |url=https://www.reuters.com/article/usa-fraud-visium-idUSL1N1F22L7 |access-date=24 December 2019 |work=Reuters |date=12 January 2017 |location=New York |language=en}} Thorell would cooperate with federal investigators who asked him to secretly record individuals at the firm including Gottlieb's brother-in-law Lumiere.{{cite news |last1=Berthelsen |first1=Christian |date=9 January 2017 |title=Visium Star Witness Taped Gottlieb While Working Undercover |url=https://www.bloomberg.com/news/articles/2017-01-09/visium-star-witness-recorded-founder-while-working-undercover |access-date=28 December 2019 |work=Bloomberg News |language=en |id={{EBSCOhost|140573975}}}} He cooperated with federal investigators and secretly recorded over 200 hours of conversations with individuals at the firm over two years.{{cite news |last1=Berthelsen |first1=Christian |url=https://archive.sltrib.com/article.php?id=4296909&itype=CMSID |title=FBI informant recorded calls at Visium hedge fund |work=The Salt Lake Tribune |agency=Bloomberg News |date=August 30, 2016 |language=en}}

In March 2016, Visium notified shareholders that Visium was being investigated by the United States Department of Justice and the U.S. Securities and Exchange Commission regarding the company's actions in regard to their Credit Opportunities Fund which had been shut down in 2013. The investigation led to large customer withdrawals.{{cite news |last1=Fortado |first1=Lindsay |url=https://www.ft.com/content/48e69852-331b-11e6-ad39-3fee5ffe5b5b |work=Financial Times |title=Current and former Visium portfolio managers charged with fraud |location=London |date=June 15, 2016 |id={{ProQuest|1804443984}} |language=en}} Later in June, three traders at the firm were charged with securities fraud.{{cite news |last1=Stevenson |first1=Alexandra |title=Visium Hedge Fund Managers Charged With Insider Trading |url=https://www.nytimes.com/2016/06/16/business/dealbook/visium-hedge-fund-managers-charged-with-insider-trading.html |access-date=23 December 2019 |work=The New York Times |date=15 June 2016 |language=en}} Sanjay Valvani and Chris Plaford were indicted for insider trading while Plaford and Stefan Lumiere were accused of inflating the value of the Credit Opportunities Fund.

The Securities and Exchange Commission barred former portfolio manager, Christopher Plaford, from the securities industry after charges that he inflated asset prices under a fraudulent scheme at Visium Asset Management.{{Cite web |title=SEC Bans Former Hedge Fund Manager for Inflating Asset Prices |url=https://www.institutionalinvestor.com/article/b1ghpg65yhxpkd/SEC-Bans-Former-Hedge-Fund-Manager-for-Inflating-Asset-Prices |access-date=2022-09-20 |website=Institutional Investor |language=en-gb}} In 2016, Plaford pleaded guilty to securities fraud and was permanently banned from the securities industry.

Separately, Plaford's cooperation with the government led to a jury conviction of a research consultant, David Blaszczak, the founder of Precipio Health Strategies, for violating insider-trading rules by obtaining and relaying nonpublic information from the Centers for Medicare and Medicaid Services about coming changes in health-care policy to Deerfield Management. The jury also convicted the government employee who leaked the tips as well as a pair of Deerfield Management employees who made trades based on the information.{{Cite news |last=Mullins |first=Brody |date=2018-05-08 |title=Hedge Fund Visium to Pay $10 Million to Settle Insider-Trading Case |language=en-US |work=Wall Street Journal |url=https://www.wsj.com/articles/hedge-fund-visium-to-pay-10-million-to-settle-insider-trading-case-1525806786 |access-date=2022-09-20 |issn=0099-9660}}{{Cite web |title=United States v. Blaszczak, No. 18-2811 (2d Cir. 2019) |url=https://law.justia.com/cases/federal/appellate-courts/ca2/18-2811/18-2811-2019-12-30.html |access-date=2022-09-20 |website=Justia Law |language=en}}

Later, Steven Ku, Visium's former Chief Financial Officer, agreed to be barred from the securities industry for one year and pay $100,000 to settle the agency's allegations that he failed to supervise portfolio managers Christopher Plaford and Stefan Lumiere. {{Cite web |date=2018-05-08 |title=Visium will pay $10 million over former traders' misconduct |url=https://www.pionline.com/article/20180508/ONLINE/180509858/visium-will-pay-10-million-over-former-traders-misconduct |access-date=2022-09-20 |website=Pensions & Investments |language=en}}{{Cite web |title=Security and Exchange Commission - Steven Ku |url=https://www.sec.gov/litigation/admin/2018/ia-4910.pdf |website=Security and Exchange Commission}}

= ''United States v. Valvani''; suicide =

In 2016, portfolio manager Sanjay Valvani and two others were charged with insider trading by federal prosecutor Preet Bharara, the United States Attorney for the Southern District of New York.{{cite news |last1=Kishan |first1=Saijel |last2=Porzecanski |first2=Katia |last3=Dolmetsch |first3=Chris |title=Visium's Valvani Found Dead in Apparent Suicide Amid Charges |url=https://www.bloomberg.com/news/articles/2016-06-21/visium-s-valvani-found-dead-in-apparent-suicide-dow-jones-says |access-date=27 December 2019 |work=Bloomberg News |date=21 June 2016 |language=en-US}} While managing the firm's flagship healthcare fund, according to federal authorities, "Valvani specifically made about $25 million by trading on non-public information about pending drug approvals from the Food and Drug Administration".{{efn|Bloomberg News reported a $32 million figure from federal authorities.}} Valvani had worked for the company since its inception in 2005, and reportedly managed as much as $2 billion in funds.

Valvani turned himself in to authorities on June 15, 2016, and was arrested.{{cite news |url=http://www.theguardian.com/us-news/2016/jun/21/sanjay-valvani-hedge-fund-manager-found-dead |title=Sanjay Valvani, hedge fund manager charged with insider trading, found dead |date=June 21, 2016 |work=The Guardian |language=en}} He pled not guilty to five counts. He was freed on bail in the amount of $5 million, secured by his home. If convicted, Valvani would have faced up to 85 years in prison.{{cite news |url=https://www.seattletimes.com/business/nyc-medical-examiner-hedge-fund-manager-killed-himself/ |title=NYC medical examiner: Hedge fund manager killed himself |work=The Seattle Times |date=June 22, 2016 |agency=AP |location=New York |language=en}}

Valvani's two alleged co-conspirators pled guilty, however. The two admitted their participation with Valvani in the illegal scheme, and agreed to cooperate in the case against Valvani.{{cite news |last1=Raymond |first1=Nate |last2=Herbst-Bayliss |first2=Svea |url=https://www.afr.com/world/north-america/hedge-fund-exec-sanjay-valvani-in-apparent-suicide-after-insider-trading-charges-20160622-gposf3 |title=Hedge fund exec Sanjay Valvani in apparent suicide after insider trading charges |date=June 21, 2016 |work=Australian Financial Review |language=en}}{{cite news |last1=Neumeister |first1=Larry |url=https://apnews.com/article/b3d9d45efeba4d2e91e4bb34bf8fd90e |title=Hedge fund manager dies of apparent suicide following arrest |date=June 21, 2016 |work=AP News |language=en}}

On June 20, 2016, five days after he was indicted, Valvani was found dead in an apparent suicide.{{cite news |last1=Vardi |first1=Nathan |title=Hedge Fund Manager Found Dead Of Apparent Suicide Amid Insider Trading Charges |url=https://www.forbes.com/sites/nathanvardi/2016/06/21/hedge-fund-manager-charged-with-insider-trading-found-dead-of-apparent-suicide/#25785f6190f8 |access-date=27 December 2019 |work=Forbes |date=21 June 2016 |language=en}} Due to his death, the government's court case against him had to be dropped.

In 2019, Visium filed a complaint against Sanjay Valvani's widow and estate seeking over $100 million be returned,{{efn|The company specifically requested a return of payments it previously made to Valvani between 2007 and 2016; he had been paid more than $30 million in a single year.}} due to Valvani's alleged illegal conduct and breach of fiduciary duty.{{cite news |last1=Levy |first1=Rachael |title=Visium Sues Widow of Portfolio Manager Who Died by Suicide |url=https://www.wsj.com/articles/visium-sues-widow-of-portfolio-manager-who-died-by-suicide-11566253192 |access-date=28 December 2019 |work=Wall Street Journal |date=19 August 2019 |language=en-US}} In 2020, the suit was dismissed by the New York Supreme Court citing the expiration of the statute of limitations.{{cite news |last1=Levy |first1=Rachael |title=Judge Tosses Hedge Fund Visium's Lawsuit Against Portfolio Manager's Widow |url=https://www.wsj.com/articles/judge-tosses-hedge-fund-visiums-lawsuit-against-portfolio-managers-widow-11590075591 |access-date=7 May 2023 |work=Wall Street Journal |publisher=Dow Jones & Company |date=May 21, 2020 |location=New York, NY |id={{ProQuest|2405320536}} |language=en}}

= ''United States v. Lumiere'' =

Two years after his sister's 2005 marriage to Gottlieb, Stefan Lumiere joined Visium, ultimately working under Chris Plaford in the firm's Credit Opportunities Fund which held assets consisting of distressed debt. He was accused of fraudulently overvaluing the assets of the fund, and was convicted of securities fraud after his case went to trial.{{cite news |last1=Levy |first1=Rachael |date=13 December 2019 |title=How the 1% Scrubs Its Image Online |url=https://www.wsj.com/articles/how-the-1-scrubs-its-image-online-11576233000 |access-date=23 December 2019 |work=Wall Street Journal |publisher=Dow Jones & Company |language=en-US }}{{cite web |title=Ex-Visium fund manager convicted of fraud by Manhattan jury |website=Reuters |url=https://www.reuters.com/article/idUSKBN1532SP |date=January 19, 2017 |language=en}}

Lumiere was sentenced to 18 months in prison followed by three years' supervised release and a $1 million fine.{{Cite news |last=Levy |first=Rachael |date=2018-09-07 |title=Founder of Hedge Fund Snared In Scandal Plots a Return |language=en-US |work=Wall Street Journal |url=https://www.wsj.com/articles/visium-founder-is-plotting-a-return-to-the-hedge-fund-industry-1536355858 |access-date=2022-09-20 |issn=0099-9660}}

= Liquidation =

In the wake of the controversy, Jacob Gottlieb wound down the company he originally founded.{{cite news |last1=Levy |first1=Rachael |date=7 September 2018 |title=Founder of Hedge Fund Snared In Scandal Plots a Return |url=https://www.wsj.com/articles/visium-founder-is-plotting-a-return-to-the-hedge-fund-industry-1536355858 |access-date=24 December 2019 |work=Wall Street Journal |publisher=Dow Jones & Company |language=en-US }} Following negotiations with the Securities and Exchange Commission in 2018, the company forfeited $10.2 million to regulators in exchange for being able to shut down.{{cite news |last1=Shazar |first1=Jon |title=Defunct Hedge Fund Ends Two-Year Negotiation With Feds, Allowed To Go Out Of Business |url=https://dealbreaker.com/2018/05/defunct-hedge-fund-ends-two-year-negotiation-with-feds-allowed-to-go-out-of-business |access-date=24 December 2019 |work=Dealbreaker |date=9 May 2018 |language=en-US}}{{cite news |last1=Mullins |first1=Brody |title=Hedge Fund Visium to Pay $10 Million to Settle Insider-Trading Case |url=https://www.wsj.com/articles/hedge-fund-visium-to-pay-10-million-to-settle-insider-trading-case-1525806786 |access-date=24 December 2019 |work=Wall Street Journal |date=8 May 2018 |location=Washington |language=en-US }} The firm had begun liquidation two years earlier, selling the Visium Global Fund to AllianceBernstein.{{cite news |last1=Krouse |first1=Sarah |last2=Copeland |first2=Rob |title=Visium Liquidates Fund, Sells Another to AllianceBernstein |url=https://www.wsj.com/articles/alliancebernstein-to-buy-visium-asset-management-fund-1466177781 |access-date=23 December 2019 |work=Wall Street Journal |date=17 June 2016 |language=en}} {{As of|2019|08|19|df=US}}, the firm was operating under the name VA Management LP.

Visium Asset Management

Business

Winding down and closure

= Investigation for fraud =

= ''United States v. Valvani''; suicide =

= ''United States v. Lumiere'' =

= Liquidation =

Notes

Sources

Further reading