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Defendant Name, Crime, State Year
Stefan Lumiere, Securities and Wire Fraud, New York 2013
U.S. Attorney Preet Bharara Comments
“In a swift verdict, a federal jury convicted Stefan Lumiere, a former portfolio manager at Visium, of securities and wire fraud. For years, Lumiere mismarked securities in his portfolio, using sham broker quotes and fake purchase prices to vastly overstate the value of his fund. The securities Lumiere traded may have been complex, but his criminal scheme was simple: lie and make up numbers to make more money. As the verdict reflects, the jury quickly saw Lumiere’s conduct for what it was, criminal fraud.”
The Scheme to Mismark Securities
At all relevant times, Visium Asset Management (“Visium”) managed hedge funds specializing in healthcare-related investments. Visium managed a credit fund (the “Credit Fund”), which operated from in or about 2009 until in or about September 2013, and invested primarily in debt instruments issued by healthcare companies.
From June 2011 through September 2013, Stefan Lumiere and others participated in a scheme to defraud the Credit Fund’s investors and potential investors by deceptively mismarking each month the value of certain securities held by the Credit Fund. The objective of the scheme was two-fold: (1) to inflate the Credit Fund’s NAV; and (2) to mislead investors about the liquidity of the Credit Fund’s holdings.
The effect of the scheme was to overstate the Credit Fund’s NAV, often by tens of millions of dollars as calculated at the end of each month to investors.
Visium assessed performance fees to be paid by investors each year based on the Credit Fund’s profits and losses. Stefan Lumiere’s mismarking was in violation of Visium’s internal valuation procedures and contrary to Visium’s representations to investors.
The case was prosecuted by the United States Attorney’s Office for the Southern District of New York and was investigated by the Federal Bureau of Investigation.”
Key Facts
- State: New York
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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