Lessons From Visium Asset Management To Prevent Finance Failure


As you may or may not have heard, Visium, a privately held investment management firm and famous name in investing, is currently under investigation by the US Justice Department and the SEC. As a finance manager, you may want to gain a better understanding of what is going on so that you can understand what it means for the future of your industry. As we give you further details on the ongoing investigation, you might want to think about the implications for your own finance company.

Trading and Values

In a letter to current clients, Visium’s founder and Chief Investment Officer Jacob Gottlieb wrote that the company is currently under investigation by the United States Justice Department and the Securities and Exchange Commission. The firm is being investigated for trading and values placed on certain commodities. The news was first broken by the Wall Street Journal in the beginning of April. The investigation is said to be focusing on the values and trading of certain stocks and individuals associated with those particular stocks, but is totally unrelated to Oracle Corp trade dealings.

Specifics Under Investigation

The Wall Street Journal reports that the specific securities being investigated are pharmaceutical stocks. Also, individuals who were associated with those pharmaceutical dealings are being targeted. One individual under investigation, Sanjay Valvani, is still employed with the company and currently holds the title of partner as well as portfolio manager. He was, of course, placed on paid leave when news of his potential involvement broke, which is just smart business. The investigation seems to be focused on uncovering insider trading that Visium and its high ranking officials may have participated in.

Visium’s Recent Performance

Visium was once a top performer in its industry. Recently however, Visium has not been performing as well, which is to be expected when an investigation is underway. Since December 2015, four funds managed by the firm have recorded losses between 4.2 percent and 7.3 percent. You can expect performance to remain less than stellar until the investigation is complete. If charges are filed, this spells bad news for the future. However, if charges are not filed upon termination of the investigation, things can turn around with proper management and use of some crucial Forex trading tips.

Effects of Visium’s Investigation

As the investigation is still ongoing and no one knows for certain whether charges will indeed be filed, there is no guarantee for what possible effect this could have on the future market. However, with Visium’s excess of 8 billion dollars in holdings, charges could spell disaster for many people down the line. Another less considered aspect that could come into play is the results of the current presidential race. The pursuit of this investigation and possible future charges could be halted if certain candidates are elected. On the other end of the spectrum, if a certain Democratic candidate makes it to the White House, the market as we know it today may be no longer. Much is up in the air right now, which rightfully can make anyone nervous.

Visium Asset Management Closure

Finally, the results of Visium Asset Management mismanagement have revealed themselves. Wall Street was rocked by the news that the $8 billion dollar hedge fund decided to close. The performance of their main fund was abysmal anyway however, the company managed to sell off a better performing fund to AllianceBernstein. Just before the announcement was made regarding the Visium closure, Sanjay Valvani was charged with wire and securities fraud. Sanjay was, as mentioned above, one of the top portfolio managers at the firm. If there is one thing to learn from the closure of Visium Asset Management it is that criminals inevitably get caught, no matter how long they are able to hide their misdealing and shady Nasdaq exchange strategies.

Fraud Conviction

As it turns out, the old Visium fund manager, Stefan Lumier, was found guilty of securities fraud back in January of 2017. His conviction followed a trial that stemmed from the federal investigation that closed Visium Asset Management LP a year prior. This offers an important lesson to other professionals, however. What is this lesson? Do not fall into the enticing trap of shady business practices. If it is easy, it is probably not above board. Make sure you always do your due diligence throughout all of your business dealings. This is the only way to protect yourself and your personal brand.

You now have the details of the current investigation of Visium by the US Department of Justice and the Securities and Exchange commission. Unfortunately however, given the current lack of information associated with the investigation or possible charges not much can be predicted for its effect on the market in coming years. As a financial manager of any company, the outcome of this magnitude can have a great impact on the industry you work in, so make sure to stay informed of current news of the situation just as you would when you practice aggressive investing.

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