Sanjay Valvani: Full Story & Must-See Details Of Dead Hedge Fund Manager

Sanjay Valvani, a 44 year old hedge fund manager for Visium Asset Management LP, was found dead on Tuesday. He is suspected to have committed suicide. Valvani was discovered by his wife in their bedroom on Monday evening at their Brooklyn residence with a wound to his neck, a New York Police Department spokeswoman said. Both a suicide note and knife were recovered from the scene. [lead image via Daily Mail]

What Happened?

Valvani was arrested last Wednesday and accused of having fraudulently made $25 million by gaining advance word about U.S. Food and Drug Administration approvals of generic drug applications. He was discovered dead by his wife in their bedroom on Monday evening at their Brooklyn residence. Valvani had originally pleaded not guilty to five criminal charges. The charges included securities fraud, wire fraud and conspiracy and was freed on $5 million bond secured by his home.
Visium had placed Valvani on leave earlier this year after it announced that it was under investigation. This past friday, Visium Assent Management said it would be shutting down its operations. Valvani was arrested last week and accused of having fraudulently made $25 million by gaining advance word about FDA drug approval.
According to the Daily Mail:

Valvani allegedly enlisted Gordon Johnston, a former senior official at the US Food and Drug Administration, to obtain confidential FDA information on the agency’s assessment of a generic version of the blood thinner Lovenox.

Valvani and a former Visium portfolio manager, Christopher Plaford, generated millions of dollars in illegal profits with trades ahead of the FDA’s decision to approve the generic version.

The two men bought shares of generic maker Momenta Pharmaceuticals and placed bets that shares of Sanofi would fall because it would lose the benefit of patent exclusivity.

As alleged, Valvani, Johnston, and Plaford conspired to extract highly confidential and tightly guarded information about pending applications for generic drug approvals from the FDA, and traded on such information, reaping millions of dollars in illegal profit

Who Is Sanjay Valvani?

Sanjay Valvani a 44-year-old was a portfolio manager with the health-oriented hedge fund Visium Asset Management LP. Valvani, along with another former employee and ex-government official, were indicted.
According to the official complaint:

  • Valvani was accused of committing securities and wire fraud with a former senior Food and Drug Administration official, Gordon Johnston, from about 2005 through 2011.
  • 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 US attorney’s statement.
  • Valvani was also charged with passing material nonpublic info to Chris Plaford, a former Visium portfolio manager, who allegedly traded on that info.
  • Johnston and Plaford have pleaded guilty and admitted their participation in the scheme.
  • The complaint said Valvani instructed Johnston, the former FDA official, about the status and approval of a generic drug, and Johnston passed along that info back to Valvani. Valvani was accused of using that info to bet on two pharma companies that were likely to be affected by the inside tip, allegedly netting about $25 million in trading profits. Valvani was also accused of tipping off Plaford on this info.

Jacob Gottlieb, the founder of Visium Asset Management, said in a statement:

“We mourn the tragic loss of Sanjay, a devoted father, husband, and friend. Our thoughts are with his family during this difficult time.”

[h/t Daily Mail]

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