Visium's Valvani Placed on Paid Leave as Firm Faces Probe

  • Valvani manages pharmaceutical investments at hedge fund
  • Firm says it hasn't concluded Valvani engaged in wrongdoing

Sanjay Valvani, a money manager at Visium Asset Management, was put on paid leave from the $8 billion hedge fund, which is being probed by U.S. regulators and prosecutors.

“We have not concluded that he engaged in wrongdoing,” a spokesman for New York-based Visium said in a statement. “However, managing capital is a challenging full-time endeavor even under normal conditions. We have accordingly spoken with Sanjay and, given the current circumstances, he is in agreement that placing him on paid administrative leave is prudent, and we have done so.”

Valvani, a partner who managed as much as $2 billion including borrowed money, was placed on leave on April 11, a person with knowledge of the matter said. Valvani didn’t respond to e-mail and office phone messages seeking comment. Calls to his home phone went unanswered.

Jacob Gottlieb, a medical school graduate who founded Visium in 2005, told investors in a letter last month that the firm is under investigation by the U.S. Securities and Exchange Commission and the Department of Justice. The government has asked about the trading of certain securities, including the use of a consultant who stopped providing services to the firm in 2011. Investigators have also requested information related to the valuation of securities of a credit fund that the firm shuttered in 2013.

Visium told investors in the letter that it’s complying with the government’s request.

Valvani manages pharmaceutical investments at Visium, where he has worked since its inception. His team is still working at the firm, the person said.

Visium’s main Balanced Fund returned about 5.6 percent last year, while the Visium Global Fund handed investors a gain of 10.2 percent. The hedge fund industry returned 0.61 percent last year, according to data compiled by Bloomberg.

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