What turned into one of the biggest insider-trading cases at a hedge fund in recent years started out as something entirely different: a probe into whether some portfolio managers at Visium Asset Management were mismarking securities and inflating returns.
Investigators found that was true -- one former money manager pleaded guilty June 9 and is cooperating, while another is fighting the case. They also found a more insidious plot: Visium partner Sanjay Valvani was paying a former Food and Drug Administration official to tap a colleague, still at the FDA, for an inside line on generic drug approvals.
