A man who used to work for Visium Asset Management LP, as a portfolio manager, just went before a jury in New York. They only needed about 90 minutes to decide he was guilty of wire fraud, conspiracy, and securities fraud.
The man's family was there when the verdict was reached, and reports indicate that they "reacted angrily." In addition, the man's legal team said that they're probably just going to appeal the decision.
The hedge fund shut down last year, after a federal investigation. When the man was working there, his sister was married to the man who founded it. They got divorced back in 2012, however. His sister disagreed with the decision, saying that the court had not been just.
According to the prosecution, the 46-year-old man and others got fake quotes from brokers, reported inflated values, and mismarked values. This alleged fraud started in 2011 and went until 2013.
Three others were also charged. One other manager faced insider trading accusations, and he took his own life in June.
In this case, the defense argued that the former manager never had any motive to break the law. They said he was the "low man on the totem pole" with the hedge fund. The fund's founder, after all, was ending his marriage with the man's sister in the midst of all of this, and they claim his boss even thought he wasn't doing a good job as a manager.
When he's sentenced, the man could be looking at fines in the realm of $5 million and 45 years in jail. That alone shows just how serious these cases can be, illustrating why it's so important for those accused of financial fraud to know their defense options.
Source: Reuters, "Ex-Visium fund manager convicted of fraud by Manhattan jury," Nate Raymond, Jan. 19, 2017