BOSTON, Aug 31 (Reuters) - Life for Jacob Gottlieb's roughly $2.3 billion Visium Global Fund officially ends on Wednesday, the manager said in a letter telling clients the bulk of their money would be returned today, five weeks after a deal to rescue the hedge fund collapsed.
Gottlieb wrote that 95 percent of the fund's assets would be distributed on or about Aug. 31 with the remainder being held back as a reserve to be returned after an audit is completed. The letter was dated Aug. 30 and seen by Reuters on Wednesday.
Visium Asset Management, which once oversaw $8 billion, has been probed by the U.S. government for improper trading and three former employees were charged with securities fraud in June. Portfolio manager Sanjay Valvani, one of the three charged, killed himself days after being arrested.
Gottlieb in late June cobbled together a deal to sell the Global Fund to asset manager Alliance Bernstein and said he was shutting down his other portfolios.
The sale collapsed in July after more than a dozen Visium managers decided to move to hedge fund Citadel.
The Visium case underscores the U.S. government's determination to keep cracking down on improper trading in the hedge fund industry some three years after Steven A. Cohen's SAC Capital Advisors, one of the industry's most successful funds, pleaded guilty to insider trading charges.
Reporting by Svea Herbst-Bayliss and Maiya Keidan; Editing by Andrea Ricci