The hedge fund at the center of an insider trading scandal is shutting down

Visium Asset Management, the hedge fund at the center of an insider trading investigation, is shutting down, according to an investor letter seen by Business Insider.

Visium is shutting its flagship balanced fund, and has suspended withdrawals and redemptions requested from investors. The fund managed $7.8 billion at the start of the year, as per Hedge Fund Intelligence.

"Any voluntary withdrawal or redemption requests submitted for June 30, 2016...will not be effective," the letter says.

Visium said it anticipates withholding 3-5% of assets in reserve for "possible liabilities and other contingencies."

Visium is also shutting its Institutional Partners Fund, Equity Alpha Fund and Equity Alpha UCITS Fund, and is selling its global fund to AllianceBernstein, the letter said.

"[G]iven the uncertainty relative to the final outcome of the recent regulatory developments, the negative impact of the resulting publicity, and the substantial investor withdrawals, it became clear that maintaining the status quo was increasingly untenable for the firm," Jake Gottlieb, Visium's founder, wrote in the letter.

The news come after a rough week for Visium. The hedge fund announced earlier this year that it was facing an investigation surrounding the valuation of a now-shuttered credit fund, and ever since had been facing an outflow of employees and questions about its stability. It came out that Steve Cohen, who is controversial for his past related to insider trading, had banned hiring from the troubled firm at his own private investment shop.

Rob Copeland at the Wall Street Journal first reported the news of the shutdown.