Archegos founder Bill Hwang found guilty of fraud
How much did Archegos's losses total?
Archegos Capital Management's losses totaled around $100 billion in market value, which led to major banks suffering $10 billion in losses2. The firm's founder, Bill Hwang, was found guilty of fraud and market manipulation following the collapse of the investment fund.
What did prosecutors accuse Bill Hwang of doing?
Prosecutors accused Bill Hwang, founder of Archegos Capital Management, of lying to banks to obtain billions of dollars, which he then used to inflate the stock prices of multiple publicly-traded companies2. This led to the 2021 collapse of his $36 billion private investment firm, causing significant losses to banks, market participants, and Archegos employees.
What was the consequence of Archegos's inability to repay banks?
Archegos's inability to repay banks led to a mass sell-off of stocks, causing the fund to collapse and resulting in billions of dollars in losses for several major banks1. The event also exposed the hidden risks of the equity derivatives business and the use of total return swaps, which allowed Archegos to take on large exposures without disclosing its overall positions6.