By Lawrence Delevingne

NEW YORK (Reuters) - Accounting firm KPMG has resigned as the auditor for Visium Asset Management, according to a letter sent to investors of the embattled hedge fund firm this week.

The hedge fund has been liquidating funds and laying off staff following charges some staff were charged with securities fraud.

Jacob Gottlieb, Visium’s managing partner, noted that it hired accountants PKF O’Connor Davies LLP to perform 2015 audits for its hedge funds, which are being liquidated.

“The transition to a new auditor is not expected to delay or otherwise affect the current schedule for paying redemptions,” Gottlieb wrote in the letter, which was sent out on Wednesday.

Spokesmen for Visium and KPMG declined to comment and PKF O’Connor Davies did not respond to a request for comment.

On Monday, former Visium portfolio manager Stefan Lumiere pleaded not guilty to charges that he engaged in a scheme to defraud investors by inflating the value of a bond fund and overstating its liquidity.

The charges stemmed from a probe that has already resulted in two people pleading guilty and insider trading charges against Sanjay Valvani, another portfolio manager at Visium who committed suicide in June following his indictment.

Separately, Chicago-based hedge fund firm Citadel hired 17 Visium portfolio managers, mostly from the flagship Visium Global Fund, according to two people familiar with the situation.

According to one of the people, they will begin work in August for a new Citadel stock-focused unit run by Richard Schimel, Aptigon, that is set to begin trading securities later this year. Most will be based in New York City, according to the person, who requested anonymity because the information is private.

The letter from Visium's Gottlieb also noted that the Global Fund would be unwound.

It's unclear what the liquidation, combined with the Citadel hires, would mean for a deal with AllianceBernstein (AB).

AB said in June that it had signed a letter of intent with Visium under which it would assume management of the Global fund, its investment team and certain support staff.

A spokesman for AB declined to comment. The news of the Citadel hires was first reported by the Wall Street Journal.

(This story fixes typo in headline)

(Reporting by Lawrence Delevingne; Editing by Carmel Crimmins)