September 27, 2023
The Yale School of Management faculty has been working overtime. Having previously dug into the funny numbers behind our hero’s biotech escapades, they have outdone themselves this time by exploring further back in time, to when young Vivek was still in law school full time, while also working at a hedge fund. Before examining what they uncovered, because you are both cynical and curious, you will probably wonder about relevant statutes.
SEC Rule 10b-5 is applicable to any person who commits securities fraud, i.e., the intentional misrepresentation of material information in connection with securities trading, including insider trading. After discovering what the Yale team found, it may come as a supreme disappointment to learn the statute of limitations for such behavior is only five years
Having graduated from Haaavard, where he showed great compassion for those on the social ladder’s lowest rungs, and realizing his career as a rapper would prove insufficiently lucrative, our protagonist gained employment at a Manhattan hedge fund.
The lyrics [selectively excerpted below] to our protagonist’s [stage name: Da Vek] favorite Eminem song, Lose Yourself, appear to have been the biotech megastar’s credo:
Look, if you had one shot or one opportunity
To seize everything you ever wanted in one moment
Would you capture it or just let it slip? yo
The moment, you own it, you better never let it go
You only get one shot, do not miss your chance to blow
This opportunity comes once in a lifetime, yo
This world is mine for the taking, make me king
As we move toward a new world order
A normal life is boring, but superstardom's
Close to post-mortem, it only grows harder
Homie grows hotter, he blows, it's all over
So here I go, it's my shot; feet, fail me not
This may be the only opportunity that I got
This opportunity comes once in a lifetime, yo
You can do anything you set your mind to, man
Our narrative begins in 2011, at a time when the biotech field was abuzz with interest in hepatitis C therapies. The Yale team described what they learned about Vivek’s hedge fund career as “shocking.” It seems he struck lightning not once, but three times. All within the span of one magical year. After having worked at the hedge fund since 2008, Vivek suddenly began hitting home runs in 2011. Pharmasset, Inhibitex, and Anadys were tree biotech startups snapped up for big bucks by large pharma fish for their hepatitis C medications. And Vivek had the foresight to pile into the stock of each with big bucks, “right around the time secret acquisition talks began in every case.” For his troubles, Vivek walked away with over $4 million. How many millions his hedge fund earned was not reported.
This could all have been coincidental, or just luck. Before jumping to any conclusions, realize the Yale researchers were careful to note: “We don't have evidence of insider trading.” They observed that while the firm “held hundreds of positions at each of these times, each of these three bets were either Ramaswamy's largest position at the time, or Ramaswamy was the single largest shareholder in the stock, making their extravagant success noteworthy.” Noteworthy indeed.
Being responsible and objective, the researchers contacted Vivek’s campaign team for comment on what they had uncovered, but were met with a snarky, ad hominem attack.
The “jokers” Yale researchers asked others with experience in such matters for their opinions. One was Tyler Schultz, the whistleblower who shut down Elizabeth Holmes’ Theranos $9 billion scam.
Schultz: "It certainly raises eyebrows given the repeated pattern."
It would be all too easy, but wrong, to make any comparison between Ms. Holmes’ business model and that subsequently employed by Mr. Ramaswamy when he followed her into the biotech industry. First of all, she was a baritone. Second, Theranos was a $9 billion firm, while Ramaswamy’s Roivant was valued at about $8 billion.
An accounting professor at Columbia Business School responded to the Yale team’s findings by noting that "I am perplexed that the SEC has not investigated these transactions with respect to insider trading." The former CEO of medical device company Medtronic described Ramaswamy as “a classic pump-and-dump guy who has not achieved on his own.”
The Yale authors concluded by noting:
Once is an accident, twice is a coincidence, three times is a pattern.
When Ramaswamy’s campaign was contacted to comment on this pattern, the response was to attack the messengers. They noted he “refuses to answer our substantive questions,” after documenting his “potentially dubious business practices.” Now we know how he became a millionaire, and have previously examined the manner in which he then attracted billions. Both journeys relied upon questionable practices. Considered as a whole, our hero was struck by lightning four times.
A review of Ramaswamy’s career – marked by the hyping of a failed Alzheimer's drug, giant payouts when other investors got burned, lawsuits alleging pressure to break securities laws and more – reveals a businessperson whose true liquid net worth is unknown and whose track record as a successful entrepreneur shows limited value creation for anyone other than himself.
“The truth is he goes for flamboyance and finding greater fools to buy into his illusions,” says the well-respected Yale Professor Jeffrey Sonnenfeld, who along with colleague Steven Tian has done extensive research into Ramaswamy’s career.
Sonnenfeld, who is the founder of the Yale Leadership Institute, and Tian have looked at Ramaswamy's biotech and hedge fund records and have repeatedly brought new information to light in Fortune magazine columns.
“[Ramaswamy] always hops out at the top and leaves his investors behind as an enterprise collapses,” Sonnenfeld tells The Messenger. "Now he is trying to make a new business by being ‘Mr. Anti-Woke.’ And he never lets the truth get in the way.”
Roivant, like many of Ramaswamy's ventures, has never turned anything close to a profit, losing around $2 billion between 2020 and 2022, with another billion-dollar loss expected for 2023.
Advanced students of Ramaswamology might wish to consult Professor Sonnenfeld’s forensic conclusions after having peered behind the illusionist’s curtain.
Let’s return to Ramswamy’s credo, Eminem’s Lose Yourself. Watch the song’s live performance at the Academy Awards and observe the audience reaction. Not exactly a MAGA crowd, or the sort of flyover country deplorables found wandering listlessly at the Iowa State Fair. Set aside the absurd reading of the crowd which led Ramaswamy to imagine that was an appropriate venue.
Ramaswamy wants us to believe he is the second coming of Trump, a younger, improved version. Had he been in the audience, among his Beautiful People bros, he would have fit right in, mugging for the cameras. Rather than a MAGA crowd, the audience was the ANTITHESIS OF MAGA.
In a brief miscalculation, Ramaswamy exposed his essence. This was his Reveal Youself moment while performing Lose Yourself.
To answer our question, Will the Real Vivek Please Stand Up?, he just did.
To be continued . . .