Hedge fund Visium loses auditor KPMG, 17 portfolio managers

Thu Jul 21, 2016 10:02am EDT
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By Lawrence Delevingne

NEW YORK (Reuters) - Accounting firm KPMG has resigned as the auditor for Visium Asset Management, according to a letter sent to investors of the embattled hedge fund firm this week.

The hedge fund has been liquidating funds and laying off staff following charges some staff were charged with securities fraud.

Jacob Gottlieb, Visium’s managing partner, noted that it hired accountants PKF O’Connor Davies LLP to perform 2015 audits for its hedge funds, which are being liquidated.

“The transition to a new auditor is not expected to delay or otherwise affect the current schedule for paying redemptions,” Gottlieb wrote in the letter, which was sent out on Wednesday.

Spokesmen for Visium and KPMG declined to comment and PKF O’Connor Davies did not respond to a request for comment.

On Monday, former Visium portfolio manager Stefan Lumiere pleaded not guilty to charges that he engaged in a scheme to defraud investors by inflating the value of a bond fund and overstating its liquidity.

The charges stemmed from a probe that has already resulted in two people pleading guilty and insider trading charges against Sanjay Valvani, another portfolio manager at Visium who committed suicide in June following his indictment.

Separately, Chicago-based hedge fund firm Citadel hired 17 Visium portfolio managers, mostly from the flagship Visium Global Fund, according to two people familiar with the situation.   Continued...

The street level sign of the KPMG buliding in downtown Los Angeles is shown April 10, 2013.  REUTERS/Sam Mircovich