While Feds saw insider trader in Sanjay Valvani, friends saw family man

Late last week, Valvani told a friend that having his integrity attacked was difficult


Sanjay Valvani, 44, was charged last week with illegally profiting on secret information about drugs in the US Food and Drug Administration’s approval pipeline. Photo: Reuters
Sanjay Valvani, 44, was charged last week with illegally profiting on secret information about drugs in the US Food and Drug Administration’s approval pipeline. Photo: Reuters

New York: Those who knew Sanjay Valvani described him as super-smart, an adoring father, an enthusiastic philanthropist and a friendly neighbour. Federal prosecutors described him as an insider trader who deserved as much as 65 years in prison.

Valvani, 44, was charged last week with illegally profiting on secret information about drugs in the US Food and Drug Administration’s approval pipeline. Prosecutors said two cooperating witnesses would implicate him, one of which is a former FDA official Valvani hired as a consultant at Visium Asset Management, where Valvani was a partner.

On Monday evening, Valvani apparently used a knife to end his life, police said. He was found by his wife, Harjot Sandhu. He professed his innocence in a suicide note, according to AP.

“He wasn’t just some kind of hardened investment guy,” said David Pyott, former chief executive officer of Allergan Plc. “He was out-going, had charisma. That is why I was even more shocked by all of this.”

Shibani Malhotra, a former health-care industry analyst, said Valvani maintained his innocence in texts they shared last week. “He was an investor that had a high moral standard and moral code,” she said.

Prosecutors said Valvani personally made more than $32 million on the trades.

Kalamazoo native

Valvani grew up in Kalamazoo, Michigan, the son of immigrants from India. He attended the University of Michigan and the University of North Carolina at Chapel Hill. His first job on Wall Street was a summer internship at the now-defunct Bear Stearns Cos. in 2000. The following year he started covering specialty pharmacies as a sell-side associate at Salomon Smith Barney, according to his profile on Duke University’s Fuqua School of Business website.

In 2003, Valvani joined Balyasny Asset Management, where medical school graduate Jacob Gottlieb was a portfolio manager.

In 2005, Gottlieb took Valvani with him when he started Visium.

“In the beginning, I really had to convince Jacob Gottlieb that I was hungry to join his hedge fund,” Valvani said in the Fuqua profile. “But I believed in myself, my education and my experience.”

Under investigation

Valvani was responsible for as much as $2 billion of Visium’s $8 billion of assets under management at its peak. After Gottlieb announced in March that his firm was under investigation, investors started asking for their money back. Now Visium is selling or winding down its funds.

Valvani went on paid leave in April. Neither Gottlieb nor his firm have been accused of wrongdoing.

“We mourn the tragic loss of Sanjay, a devoted father, husband and friend,” Gottlieb said in a statement on Tuesday.

In 2012, Valvani pledged $250,000 to endow two scholarship funds at Fuqua, where he earned his MBA in 2001. Valvani named one of the scholarship funds after Associate Dean for Admissions Liz Riley Hargrove, who said she knew Valvani from the time he was in graduate school.

‘Natural charisma’

“His natural charisma and genuine passion for pursuing his education stood out to me,” Hargrove said in an e-mail. “My heart is simply broken.”

Valvani and his wife supported the Brooklyn Bridge Park Conservancy and he served on the board of Urban Arts Partnership, a charity for arts education in New York City and Los Angeles classrooms.

“As someone who came from humble beginnings, Sanjay believed passionately in UAP’s mission to provide educational opportunity and the tools necessary for success to the less fortunate,” said Philip Courtney, the organization’s chief executive officer.

Brooklyn Heights

Valvani lived with his wife, two daughters and their two dogs in the Brooklyn Heights neighbourhood of New York City, in a brick townhouse built before the Civil War.

Across the street is the red-brick St Charles Borromeo Roman Catholic Church, built in 1869. Father Edward Doran said Valvani didn’t seem like a typical Wall Street guy, working all the time.

“He was a lovely man,” Doran said. “He was very present for his family. He always seemed to be very involved with his children. I’d see him every day out with those dogs.”

On 14 June, when Valvani surrendered to authorities in lower Manhattan, the federal judge overseeing the case required that he post the home as part of his $5 million bail.

Five felonies

Lean and over six feet tall, Valvani appeared in federal court wearing a pale lavender shirt with rolled-up sleeves and pressed gray slacks.

US district judge Sidney Stein told Valvani he was charged with five felonies—two counts of conspiracy, two counts of securities fraud and one count of wire fraud.

When Valvani said, “Not guilty, your honour,” he looked dazed.

Cooperating witnesses

The office of the US attorney for the southern district of New York Preet Bharara said it had already won the cooperation of two witnesses who could implicate Valvani in insider trading—a former FDA official named Gordon Johnston and former Visium colleague Christopher Plaford, to whom Valvani had allegedly passed inside information.

Bharara’s office said Plaford had been secretly cooperating with the government for the last two years and was a key witness against Valvani.

Late last week, Valvani told a friend that having his integrity attacked was difficult. Valvani said he felt isolated, alone, even toxic, according to the friend, who asked that his name not be used.

When they met for lunch, Valvani didn’t want to talk about the case against him, the friend said. There was a lot weighing on him. But he said he had a lot to live for, too.

Malhotra said she and Valvani texted each other last week.

“He sounded happy and strong, that he was going to win the case,” Malhotra said. She said she told him, “A lot of people believe in you.” And he replied, “‘That means so much to me.”’

“I said, ‘Stay strong,’ and he said, ‘I will.”’ Bloomberg

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