Recent Regulatory Actions Against Advisers

SEC v. Visium Asset Management LP

Visium has agreed to settle charges related to asset mismarking and insider trading by its managed hedge funds and portfolio managers who inflated the value of securities held by hedge funds it advised causing the funds to falsely inflate returns, overstate aggregate net asset value, and pay excess fees. Based on confidential information from a former FDA official working as a paid consultant to Visium, certain Visium portfolio managers traded in the securities of pharmaceutical companies in advance of two generic drug approvals by the U.S. Food and Drug Administration. Among other violations, the SEC found that Visium failed to enforce its own valuation and insider trading policies and procedures that might have prevented mispricing and the insider trading.

Author: Dexter Johnson

The author is a an attorney who for the past 14 years has concentrated his practice in representing, successfully, investment advisers, broker-dealers, corporations and individuals who are subject to SEC, FINRA, State or other regulations and who may be the subject of regulatory examination, review or investigation. He formerly worked at the SEC. His regulatory and litigation experience has encompassed virtually every type of securities issue in the industry. He has also negotiated favorable outcomes in many of these matters for his clients.