A manager at a one-time $8 billion hedge fund has been reportedly found guilty of securities fraud

Preet Bharara, U.S. Attorney for the Southern District of New York, speaks during a news conference in New York
Thomson Reuters

A one-time portfolio manager at a New York hedge fund that shuttered last year amid an insider trading scandal has been found guilty of federal securities fraud, according to a Bloomberg News report.

Stefan Lumiere was found guilty of inflating bond prices in Visium Asset Management’s credit fund, Bloomberg reported.

Here’s Bloomberg:

“Prosecutors said Lumiere solicited sham quotes from brokers to justify inflated valuations on distressed-debt holdings. Jurors rejected his claim that he thought the prices he was assigning were legitimate and done at the behest of his boss, who pleaded guilty and testified against him.”

A lawyer for Lumiere declined to comment and a spokesman for Visium didn’t immediately respond to a request.

Lumiere is the ex-brother in law of Visium’s founder, Jake Gottlieb, a physician who founded the firm, which became known for investing in healthcare stocks.

Sanjay Valvani, a star fund manager overseeing the firm’s healthcare fund, committed suicide last year days after he was accused of insider trading. Gottlieb hasn’t been accused of any wrongdoing.