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The Morning Brief: Former Visium Portfolio Manager Sentenced

Stefan Lumiere was ordered to serve 18 months in prison following his conviction on securities and wire fraud charges.

Former Visium Asset Management portfolio manager Stefan Lumiere was sentenced to 18 months in prison after being convicted of securities and wire fraud charges, according to an announcement from Joon Kim, the Acting United States Attorney for the Southern District of New York. Lumiere was accused of mismarking securities in a fixed-income hedge fund, which inflated the net asset value of the fund and overstated its liquidity, from 2011 to 2013. Lumiere was also sentenced to three years of supervised release and ordered to pay a fine of $1 million.

In the trial, a jury reportedly found him guilty after just 90 minutes of deliberations. He is one of three former Visium portfolio managers criminally charged by the federal government for their roles in several securities violations. Visium portfolio manager Sanjay Valvani was charged with securities fraud and wire fraud connected to an insider trading scheme with Gordon Johnston, a political intelligence consultant and former senior official at the Food and Drug Administration. Valvani was also charged with passing certain confidential information to Christopher Plaford, a former portfolio manager who was also charged. Lumiere was charged in a separate scheme with Plaford. Plaford pleaded guilty to seven counts, including participating in this scheme as well as another scheme involving another political intelligence consultant. Valvani committed suicide several days after he was charged. Visium, which once managed as much as $8 billion, returned money to clients after the government brought its charges last year.

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Jamie Dinan is setting in motion his succession plan at York Capital Management. The New York hedge fund firm promoted Bill Vrattos and Christophe Aurand to co-chief investment officers, effective July 1, according to the Wall Street Journal. Vrattos is the head of York’s debt fund, while Aurand steers the European funds. In addition, York named chief investment officer Dan Schwartz as a co-chief executive officer, serving along with Dinan. York has been suffering from a sharp reduction in assets due to losses in some of its funds. It started the year with $16.2 billion, down from $22.3 billion the year before.

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Bill Ackman’s Pershing Square Holdings is barely in the black after suffering a very rough week. His publicly-traded fund is now down 3.5 percent for the month. As a result, it is up just 0.70 percent for the year.

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