Visium Asset Management


Visium Asset Management LP was an American multi-strategy hedge fund that began as a healthcare-focused hedge fund, founded by Jacob Gottlieb in 2005. Visium managed several investment funds, with about $8 billion of assets under management and 170 employees at its peak in 2016. That year 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.

Jacob Gottlieb

Jacob Gottlieb was born in Brooklyn, New York, around 1971–1972. He graduated with a Bachelor of Arts in economics from Brown University and went on to receive an M.D. from New York University School of Medicine. While originally seeking to become a surgeon, according to Gottlieb, he decided instead to work on Wall Street after graduating college.
Having previously managed healthcare related portfolios for several investment companies, Jacob Gottlieb started Visium Asset Management LP in 2005. Initially starting with [|Visium Balanced Fund], Gottlieb would explain in a 2012 interview with Institutional Investor that he hoped to have the company later offer enough diversified products to eventually challenge the largest hedge fund managers in the industry.
In 2018, he would begin another firm known as Altium Capital as its first CEO. A 2019 article by The Wall Street Journal reported Gottlieb hired reputation management company Status Labs to challenge negative news coverage about him and Visium while also helping him raise money for Altium Capital.

Business

Funds

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. At the company's most successful point in 2016, they had at least $8 billion in assets under management.
NameStartEndFateNotes
20052016The firm's flagship healthcare equity fund. It would later serve as a model for Altium Capital.
20092016Bought by AllianceBernstein.
2016
2016
20152016A diversified United States-focused equity fund with long and short positions.
20092013Investigated in March 2016 over valuation of securities.
20132015

Conflicts of interest

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. In 2009, Jacob Gottlieb hired his brother Mark as chief compliance officer 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 Gottlieb."
Despite his public commitment to "the highest ethical conduct ", Gottlieb directly owned 25,703 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, reported to 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." Thorell would cooperate with federal investigators who asked him to secretly record individuals at the firm including Gottlieb's brother-in-law Lumiere.
In March 2016, Jacob Gottlieb disclosed to shareholders that Visium was being investigated by the United States Justice Department and the SEC regarding the company's actions in regards to their [|Credit Opportunities Fund] which was shut down in 2013. Later in June, three traders at the firm were charged with securities fraud. 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.

Suicide of Sanjay Valvani

On 20 June 2016, former company partner Sanjay Valvani was found dead in an apparent suicide. Valvani was among those charged with insider trading by then prosecutor Preet Bharara. 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".
Valvani pleaded not guilty to the charges against him five days before he took his own life. Vivani worked for the company since its inception in 2005 and reportedly managed as much as $2 billion in funds. Due to his death, the 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, due to Valvani's alleged illegal conduct and breach of fiduciary duty.

''United States v. Lumiere''

Two years after his sister's 2005 marriage to Gottlieb, Stefan Lumiere joined Visium to manage the firm's Credit Opportunities Fund which held assets consisting of distressed debt. Upon being accused of fraudulently overvaluing the assets of the fund, he denied any wrongdoing as well as the accuracy of the government's statements against him. However, Lumiere was ultimately convicted of securities fraud after his case went to trial.

Bankruptcy

In the wake of the controversy, Jacob Gottlieb became tasked with winding down the company he originally founded. Following the end of negotiations with the Securities and Exchange Commission in 2018, the company forfeited $10 million to regulators in exchange for being able to declare bankruptcy. The firm began liquidation two years earlier selling its primary investment fund to AllianceBernstein.
, the firm was operating under the name VA Management LP.