- Manager seeks evidence suppression, names of co-conspirators
- Lumiere is sole remaining defendant in insider-trading case
A former trader-turned-informant secretly recorded more than 125 conversations with ex-colleagues at hedge fund firm Visium Asset Management LP, according to a court filing.
The informant, previously identified by Bloomberg News as junior trader Jason Thorell, spent more than two years cooperating with the Federal Bureau of Investigation and the U.S. Securities and Exchange Commission. He is identified in court papers only as “CC-1,” or co-conspirator-1. Thorell didn’t return a text message to his cell phone seeking comment.
The case began as an investigation into whether portfolio managers at the $8 billion firm were inflating the value of holdings in its credit portfolio, and then expanded to allegations that Visium was trading on health-care securities using insider tips from a former official at the U.S. Food and Drug Administration. Stefan Lumiere, an assistant portfolio manager at the firm’s credit fund, is the sole remaining defendant in the case after two others pleaded guilty and the most senior executive charged, Sanjay Valvani, committed suicide.
According to the court filing Tuesday in Manhattan federal court, Thorell recorded more than 200 hours of conversations for the government. The filing, submitted by Lumiere’s lawyers, also revealed that Lumiere met with government agents and prosecutors on April 24, 2014, during a so-called proffer session. At such meetings, a person under investigation agrees to answer questions without having his comments later used against him.
Lumiere’s lawyers are also asking the judge to order prosecutors to identify other accomplices, in addition to those already cited in court papers as "Broker-1" and "Broker-2." Defense lawyers said they’ve already received more than 1 million pages of evidence from the government, including e-mails between Visium executives and numerous brokers.
A judge has granted Thorell immunity for his testimony in the case, and he may get a payout for disclosing wrongdoing to the federal government, according to an FBI affidavit. The Securities and Exchange Commission’s beefed-up whistle-blower program has awarded $85 million to almost three dozen individuals.
Dawn Dearden, a spokeswoman for U.S. Attorney Preet Bharara in Manhattan, declined to comment on the filing. A lawyer for Lumiere, Eric Creizman, didn’t immediately return a call.
The case is U.S. V Lumiere, 1:16-cr-00483, U.S. District Court, Southern District of New York (Manhattan).