(Reuters) - A former portfolio manager at Visium Asset Management LP was sentenced to 18 months in prison on Wednesday following his conviction on securities fraud charges stemming from an investigation that led the New York-based hedge fund to close last year.
Stefan Lumiere, 46, was sentenced by U.S. District Judge Jed Rakoff in Manhattan federal court, according to federal prosecutors.
Prosecutors had said in a brief filed in court that they believed a sentence of up to 14 years would be appropriate, while Lumiere’s lawyers argued for a lighter sentence.
“We are pleased that our arguments resonated with the court,” Lumiere’s lawyers, Jonathan Halpern and Jon Friedman, said in a statement. They said Lumiere would appeal his conviction.
Lumiere, whose sister was married to Visium founder Jacob Gottlieb when he worked at the hedge fund, was found guilty of conspiracy, securities fraud and wire fraud charges in January after a six-day trial.
The trial followed a investigation of Visium that prompted the $8 billion firm’s wind-down and charges against three others, including Sanjay Valvani, a portfolio manager who committed suicide in June after being accused of insider trading.
Prosecutors said Lumiere and others conspired from 2011 to 2013 to mismark the value of securities held by a bond fund, which invested in debt issued by healthcare companies and which in 2012 reported peak net assets of $471.5 million.
Lumiere and others rigged the process of valuing the Visium Credit Opportunities Fund’s distressed-debt holdings by, among other things, obtaining sham quotes from brokers, who gave them the inflated values they wanted, prosecutors said.
The case is U.S. v. Lumiere, U.S. District Court, Southern District of New York, No. 16-cr-00483.
Reporting By Brendan Pierson in New York; Additional reporting by Nate Raymond; Editing by Bill Trott