March 7, 2016 / 7:11 PM / 3 years ago

Visium Asset Management probed by DoJ, SEC over trading, valuations

(Reuters) - Hedge fund Visium Asset Management LP is being investigated by the U.S. Justice Department and the Securities and Exchange Commission over trading and valuation issues, according to a letter seen by Reuters.

Visium, which invests roughly $7 billion in assets, told employees and clients on Monday that the officials are reviewing how the New York-based firm valued certain securities in a credit fund that was shut in 2013.

The firm also said the government has requested information regarding the trading of certain securities, including the use of a consultant who stopped providing services to the firm in 2011.

“We are providing the requested information to the Government,” Visium’s founder and chief investment officer Jacob Gottlieb wrote in a letter to clients that was seen by Reuters. He added that he is not able to discuss the specifics while the investigation is ongoing but urged clients to call with any questions or concerns.

A spokesman for the fund declined to provide further comment and it is unclear whether or not any charges will be filed against the firm.

The Wall Street Journal first reported news of the government investigation.

Gottlieb, who earned a medical degree from New York University before moving to Wall Street, founded Visium in 2005 and has built it into a firm that employs over 170 people in offices in New York, London and San Francisco.

The fund invests money for pension funds including the New Jersey State Investment Council and last year delivered gains when the average hedge fund lost money.

The firm’s multi-strategy fund, Visium Global, gained 10.2 percent last year but it is off 2 percent in the first two months of 2016. Its healthcare fund, Visium Balance, gained 5.6 percent last year but is down 3 percent, a person familiar with the returns said.

“The Visium Balanced Fund and Visium Global Fund have liquid portfolios and we remain focused on achieving superior returns for our investors,” Gottlieb wrote in the letter.

Reporting by Svea Herbst-Bayliss in New York and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila

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