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The Morning Brief: Visium Under Investigation by DoJ, SEC

Visium Asset Management says it is being investigated by the feds. The $7 billion New York hedge fund firm, founded by Jacob Gottlieb, told clients in a March 7 letter that the Department of Justice and also the Securities and Exchange Commission have asked the firm for information from several years ago related to the valuation of certain securities in its credit fund, which was shut down in 2013.

“Additionally, they have requested information regarding the trading of certain securities, including the use of a consultant who stopped providing services to the firm in 2011,” Gottlieb states in the letter obtained by Alpha. “We are providing the requested information to the Government.”

Gottlieb tells clients the firm is in contact with its advisors and “will continue to proactively and diligently manage the situation.” Adds Gottlieb: “We have always embraced a strong culture of compliance.”

Visium was founded in 2005 and now has more than 170 professionals in New York, London and San Francisco. Last year, the Visium Global Fund gained 10.3 percent and Visium Balanced Offshore returned a little less than 6 percent.

Earlier this year, Gottlieb won a high-profile divorce settlement with his wife, Alexandra Lumiere. Under the deal, he will not have to pay alimony and his wife will be required to leave her upscale Central Park West apartment when their two children grow older.

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February was a profitable month for hedge funds despite reports of the large number of individual funds that suffered big losses, according to at least one data tracker. The HFRI Fund Weighted Composite Index, which equally weights the funds that comprise the index, rose 0.5 percent last month, trimming its loss for the year to 2 percent. However, HFR’s asset-weighted index fell by 0.9 percent last month, extending its decline for the year to 2.6 percent. The HFRI Macro Index climbed 1.9 percent, bringing its gain for the year to 3.1 percent. The HFRI Event Driven Index fell 0.3 percent last month. Little surprise, the best performing sub-strategy was the short bias index, rising 5.4 percent.

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D.E. Shaw & Co. disclosed it owns 5 percent of Liberty TripAdvisor Holdings, whose businesses consist of Liberty subsidiaries TripAdvisor, the online travel company, and BuySeasons, an online retailer of costumes and party supplies.

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The volatile shares of hedge fund favorite Valeant Pharmaceuticals International jumped more than 7 percent on Monday after the embattled drug company said it will hold a conference call and live webcast on March 15 with investors to discuss preliminary fourth quarter 2015 financial results and update 2016 financial guidance. “February 29th was my first day back to work following a two month medical absence,” said Michael Pearson, chief executive officer, in a press release. “Now that I have returned, I have been working diligently to review the business so that I can share our latest performance and outlook with shareholders.”

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