Pro Tip: Keep The People Fraudulently Inflating Your Valuations Happy

Visium Asset Management learned this one the hard way.
This thing? Oh, pay no mind. By 東照大権現 (Own work) [Public domain or Public domain], via Wikimedia Commons

Don't worry about it. via Wikimedia Commons

It seems Visium Asset Management didn’t in the case of junior trader Jason Thorell, who apparently decided that if the hedge fund wouldn’t pay him for his alleged misdeed, maybe the SEC and Justice Dept. would. And now Thorell has immunity and a possible handsome payday coming his way, and Visium is no more.

A former trader at Visium Asset Management LP told an ex-colleague that one of his first stops after leaving the firm was the SEC. What he didn’t say was that he had turned on his former co-workers and was secretly recording their conversations for the FBI….

In many ways, Thorell, now 38, fits the mold of a whistle-blower -- many of whom are disgruntled former workers eager for reward and perhaps vindication because of the alleged misdeeds of an ex-employer….

For two years, Thorell and others solicited fraudulent quotes from brokers and sent them to the fund’s administrator to override valuations on illiquid distressed holdings, according to court papers. When Lumiere sought more brokers to provide sham quotes, Thorell volunteered one particular candidate because the broker worked at a “bottom of the barrel” firm, according to the affidavit.

Visium Trader-Turned-Whistle-Blower Tied to Hedge Fund’s Demise [Bloomberg]