Sanjay Valvani, hedge fund manager charged with insider trading, found dead

The hedge fund manager’s death has since led to commentators on the web wondering how common illicitly gotten gains are endemic in the industry and how Valvani against the odds came to be found out?

Valvani specifically made about $25 million by trading on non-public information about pending drug approvals from the Food and Drug Administration, federal prosecutors claimed.

The Securities and Exchange Commission alleged that he reaped unlawful profits of almost $32 million for hedge funds investing in health-care securities by insider trading on tips he received.

Valvani’s wife found him face down and unconscious late Monday on the bedroom floor of their Brooklyn Heights home, a brick townhouse on a quiet one-way street, the official said. Mr. Valvani pleaded not guilty last week in federal court in Manhattan. The 64-year-old was also charged and pleaded guilty to passing information to Valvani.

On top of the insider-trading charges, prosecutors allege Plaford and former Vision portfolio manager Stefan Lumiere committed fraud by inflating the value of a bond fund by mismarking securities.

Valvani “unlawfully obtained highly confidential and material nonpublic information from the FDA about the agency’s approval of pending generic drug applications”, according to the United States attorney’s statement.

Johnston pleaded guilty last week, admitting his role in the scheme.

The city’s medical examiner’s office will determine the cause of Valvani’s death and police said an investigation was under way. “Our thoughts are with his family during this hard time”, Visium’s founder Jacob Gottlieb responded.

“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”, Valvani’s lawyers said, adding that he was a “loving father, husband, son and brother”.

Gottlieb wrote to clients that one of the firm’s portfolios is being sold to AllianceBernstein and that the Balanced Fund, where Valvani worked, was being shut down.