Ex-portfolio manager convicted of securities fraud charges
A former portfolio manager at an asset management firm has been convicted of securities and wire fraud charges by a New York jury
NEW YORK (AP) -- A former portfolio manager at an asset management firm was convicted of securities and wire fraud charges on Thursday.
Stefan Lumiere, who worked at Visium Asset Management LP, was convicted in Manhattan federal court by a jury that deliberated less than two hours.
Prosecutors said Lumiere conspired in a scheme to artificially inflate the value of a fund made up of debt instruments issued by health care companies from 2011 to 2013. They said he obtained false and fraudulent price quotes from friendly brokers outside Visium to override prices calculated by the credit fund's administrator.
Prosecutors said the scheme cause investors in the fund to overpay for securities.
Lumiere's sister, Alexandra Lumiere Gottlieb, was married to Visium founder Jacob Gottlieb, and her brother left the firm as they went through contentious divorce proceedings. The divorce, which Lumiere Gottlieb said is not finalized, was mentioned during the trial.
Outside court, she criticized the verdict.
"I can tell you he's innocent," she said. "What's questionable is our entire system of justice."
Lumiere's lawyer, Eric Creizman, said an appeal is likely.
"I'm sorry it happened," he said of the verdict. "I feel we tried our case as well as we possibly could."
U.S. Attorney Preet Bharara said Lumiere for years mismarked securities in his portfolio of debt instruments.
"The securities Lumiere traded may have been complex, but his criminal scheme was simple: Lie and make up numbers to make more money," Bharara said in a written statement. "As the verdict reflects, the jury quickly saw Lumiere's conduct for what it was, criminal fraud."
Prosecutors said Lumiere inflated the volume of the hedge fund by tens of millions of dollars.
Creizman argued that a whistleblower at the company turned to the federal government to get revenge on his employer because he believed the company did not recognize his talent.
Lumiere, who's 46 years old, is set for sentencing in May.
