Hedge fund manager dies of apparent suicide following arrest

AP News
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Posted: Jun 21, 2016 4:20 PM

NEW YORK (AP) — A hedge fund manager arrested last week on insider trading charges declared his innocence in a short, handwritten note before he was found dead with a slashed neck in an apparent suicide, authorities said Tuesday.

Sanjay Valvani, 44, was unresponsive when his wife found him early Monday evening in a bedroom of their Brooklyn Heights home, said Detective Ahmed Nasser, a New York Police Department spokesman. A knife was found nearby, he said.

A note on loose-leaf paper was found at the scene, said a law enforcement official who was not authorized to be quoted by name on the subject and spoke to The Associated Press on condition of anonymity. In the note, Valvani references the indictment and the uncertainty it has caused, and he declared his innocence and thanked friends for their love and support, the official said.

Defense attorneys Barry Berke and Eric Tirschwell said in a statement that Valvani's death was a "horrible tragedy that is difficult to comprehend." They added: "We hope for the sake of his family and his memory that it will not be forgotten that the charges against him were only unproven accusations and he had always maintained his innocence."

Prosecutors declined to comment.

Last week, Valvani pleaded not guilty to criminal charges that he persuaded a former senior Food and Drug Administration official to give him inside information about generic drug approvals, allowing him to earn about $25 million illegally from 2005 through 2011. If convicted, Valvani could have faced up to 85 years in prison, though insider trading cases have rarely resulted in sentences longer than a decade.

The Securities and Exchange Commission said in a release last week that Valvani made unlawful profits of nearly $32 million from tips he received from Gordon Johnston, who worked at the FDA for a dozen years and remained in close contact with ex-colleagues while he worked for a trade association representing generic drug manufacturers and distributors.

Johnston pleaded guilty last week, admitting his role in the scheme.

Valvani was a partner and money manager at Visium Asset Management in New York City. Jacob Gottlieb, who founded Visium in 2005, said in a statement Tuesday: "We mourn the tragic loss of Sanjay, a devoted father, husband and friend. Our thoughts are with his family during this difficult time."

The medical examiner's office will determine the cause of Valvani's death. Police said their investigation was continuing.