His father, Dr. Arthur "Artie" Niederhoffer (1917–1981), graduated from Brooklyn College in 1937, and then from Brooklyn Law School, and finally with a Ph.D. from New York University (1963). He served in the New York City Police Department for 21 years (retiring as a lieutenant), and then taught as a professor of Sociology at John Jay College of Criminal Justice for 14 years. Also he taught at Hofstra University, Brooklyn College, New York University, Queens College, and the New York City Police Academy, authored several books on the police and criminology including "Behind the Shield", "The Ambivalent Force", "The Gang", and "The Police Family: From Station House to Ranch House" (co-authored with his wife), and was awarded the President's Medal of John Jay College for his achievements in criminal justice. His mother, Elaine (née Eisenberg) Niederhoffer (1925–2006), was an English teacher, author, and editor who had descended from a long line of rabbis. His brother Roy Niederhoffer, who is himself a hedge fund manager, worked for Victor and his hedge fund from 1987 to 1992, trading fixed-income securities.