This is taking Stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. Last week, Sanjay Bobani, partner at hedge fund Visium Asset Management, was arrested on insider trading charges that led to Visium's decision to liquidate four of its hedge funds. Last night, New York City police were called to his home, where they found a knife near his body and a suicide note. He was forty four years old.
Let's step back and ask what this means for the hedge fund industry, certainly of vulnerable time, and of course we express our sympathy to all his friends and colleagues of Visium and to his family. Simone Foxman joins us. Now she's hedge fund reporter at Bloomberg News. So someone tell us a little bit more about this hedge fund, how it operated, and what he was charged with. So Visium, the asset management was, you know, as of earlier this year,
an eight billion dollar hedge fund. Initially it was it was healthcare related, and its founder, Jacob Gotlieb decided um to to branch out. His idea was to create that sort of a multi strategy UM fund allah Millennium management. That's azz the Englanders or Citadel Ken Griffin um. And you know, certainly seemed things seem to be going that way until the allegations first mentioned. He first mentioned to two investors in March, and then last week we saw
the um that that those allegations were unsealed. UM. So uh, Sanjay Valvani was a star trader there and really quite close. Uh. It was very important at the firm. And so I think this is certainly a surprise, um to the to the industry at a whole. Whether it's surprising to people at the firm is less clear. Now the U S attorney had accused of Valfoni of paying a former Food and Drug Administration employee to pass along tips about pending
drug approvals. I wonder if you could describe what that means for the hedge fund industry, because it's not as if this is the first time that drug approvals has been in the spotline, right, and and this certainly seems to be uh, you know, pharma certainly seems to be an area where this is more likely um to happen than perhaps other sectors because there's it's such a binary event. Are you going to get the f DAI it's approval
or not um. You know, it's this is sort of a really negative mark um for the hedge fund industry right now. It's performance has been really tough um lagging the the SMP five hundred index. You know, hedge ones in the whole have been lagging the SMP five hundred index for many years since the financial crisis. Well, I think a lot of skeptics has always wondered if they were really playing by the rules, because anyone would say, if you cheat, it's a lot easier to win, it's
a lot easier to make money. What does this mean for hedge funds going forward? Right and at the same time as they're trying to just to fy their hefty fees, you know, you're seeing this very high profile case come forward at hedge fund that had spectacus pretty spectacular returns of the last couple of years, and it really makes
you question. You know, this friendship went back a while between this star trader at museum and the FDA official, So it really makes you question where those returns came from and how much how much people knew as far as this case. What happens now because there are other people that were implicated and charged with this particular case, right, and there are two parts of the case UM. This
this insider trading piece UM. Both both Valvani and UM another UM money manager Chris Platford, were implicated in this case. UM Platford as well as the the f d A, the formal official had been had pled guilty. There is a whole another side of of this UM of these accusations, and that's the mismarking of of bonds and that's sort of somewhat pretty separate from from this. It was a two pronged investigation UM. So that certainly, I mean, these
things are still ongoing. Uh, you know, remains to be seen how this will impact the other sentences and the cases going forward. Thank you very much. A Simone Foxman, hedge fund reporter for a Bloomberg News. You can follow Simone on Twitter at Simone Foxman.