Visium is the biggest hedge fund in the industry to have employees linked to criminal wrongdoing since the government set its sights on billionaire Steve Cohen’s SAC Capital Advisors. That firm pleaded guilty to federal insider-trading charges in 2013, agreed to pay $1.8 billion and was forced to shut its doors.
Stefan Lumiere, a former Visium money manager, was also charged in the case. He was accused of mismarking securities at Visium. His lawyer has said he’s innocent. A third former Visium employee, Chris Plaford, pleaded guilty to securities fraud charges.
Valvani died as an innocent man. Because he passed away before his case was resolved, the court is required to dismiss the charges against him.
“This is a horrible tragedy that is difficult to comprehend,” Berke, Valvani’s lawyer, said. “Sanjay Valvani was a loving father, husband, son and brother and committed friend, colleague and mentor. We hope for the sake of his family and his memory that it will not be forgotten that the charges against him were only unproven accusations and he had always maintained his innocence.”
Insider trading investigations can have a devastating emotional impact on people suspected or accused of crimes, leading to public shaming, industry blackballing and the prospect of prison. In 2011, two days after jurors at a trial of three traders heard Ephraim Karpel discussing suspicious trades in a wiretapped conversation, he hanged himself in his Manhattan office. Karpel, who was 50 and had not been charged, had cooperated with prosecutors by taping fellow traders.
That year, James Fan leaped to his death a day after he was accused of trading on inside knowledge of a health-care company, where he was manager of clinical programming. He was 39.
Dow Jones earlier Tuesday reported the apparent suicide.