$120 Billion Family Office Archegos Bill Hwang Submits Court Filing to End United States SEC Lawsuit Citing Trades are Legal & Traded Like an Enthusiastic Investor, Criminal Trial Scheduled for 10th Oct 2023
28th October 2022 | Hong Kong
$120 billion family office Archegos Bill Hwang had submitted court filing to end United States SEC (Securities & Futures Commission) lawsuit against him & Archegos Capital Management, citing trades are legal & his firm had traded like any enthusiastic investor. The criminal trial is scheduled 1 year later on 10th October 2023. In August 2022, United States prosecutors submitted a 12 pages filing on Archegos Family Office (Archegos Capital Management LP), accusing Archegos of misleading banks on Archegos liquidity and portfolio concentration 6 months before its collapse in March 2021, with total exposure growing to around $160 billion with only $1.5 billion in net asset. In Bill Hwang’s filing, United States SEC had failed to show Archegos (Bill Hwang) had traded deceptively (manipulate the market) and the SEC had declared unlawful a number of practices that have long been accepted as entirely legitimate and commonplace in the market. The trades were no different from transactions by “an enthusiastic investor with the means to pursue an investment opportunity.” The United States Supreme Court precedent means United SEC do not have the “right” to pursue claims that Archegos had violated securities laws (not revealing to banks about its liquidity & portfolio to borrow money for its trades). Read Credit Suisse Report | Read Archegoes History
” $120 Billion Family Office Archegos Bill Hwang Submits Court Filing to End United States SEC Lawsuit Citing Trades are Legal & Traded Like an Enthusiastic Investor, Criminal Trial Scheduled for 10th Oct 2023 “
United States Prosecutors Filing: Archegos Family Office Misled Banks on Liquidity & Portfolio Concentration 6 Months Before Collapsed in March 2021, $1.5 Billion Assets to $160 Billion Exposure
August 2022 – In the United States prosecutors 12 pages filing on Archegos Family Office (Archegos Capital Management LP), the prosecutors has accused Archegos of misleading banks on Archegos liquidity and portfolio concentration 6 months before its collapse in March 2021, with total exposure growing to around $160 billion with only $1.5 billion in net asset. The next hearing is on Sept. 8 2022. The case is U.S. v. Hwang et al, U.S. District Court, Southern District of New York, No. 22-cr-00240. Earlier in April 2022, the United States Securities and Exchange Commission (SEC) has charged Sung Kook (Bill) Hwang, the owner of family office Archegos Capital Management, Chief Financial Officer (Patrick Halligan), Chief Risk Officer (Scott Becker) and Head Trader (William Tomita) for orchestrating a market manipulation fraudulent scheme from $1.5 billion asset value (March 2020) to $160 billion exposure (March 2021) that resulted in billions of dollars in losses. United States SEC: “From at least March 2020 to March 2021, Hwang purchased on margin billions of dollars of total return swaps. These security-based swaps allow investors to take on huge positions in equity securities of companies by posting limited funds up front. As alleged, Hwang frequently entered into certain of these swaps without any economic purpose other than to artificially and dramatically drive up the prices of the various companies’ securities, which induced other investors to purchase those securities at inflated prices. As a result of Hwang’s trading, Archegos allegedly underwent a period of rapid growth, increasing in value from approximately $1.5 billion with $10 billion in exposure in March 2020 to a value of more than $36 billion with $160 billion in exposure at its peak in March 2021.” View full statement below | Read Credit Suisse Report | Read Archegoes History
United States SEC Official Statement:
27th April 2022 | The Securities and Exchange Commission today charged Sung Kook (Bill) Hwang, the owner of family office Archegos Capital Management, LP (Archegos), with orchestrating a fraudulent scheme that resulted in billions of dollars in losses. The SEC also charged Archegos’s Chief Financial Officer, Patrick Halligan; head trader, William Tomita; and Chief Risk Officer, Scott Becker for their roles in the fraudulent scheme.
The SEC’s complaint alleges that, from at least March 2020 to March 2021, Hwang purchased on margin billions of dollars of total return swaps. These security-based swaps allow investors to take on huge positions in equity securities of companies by posting limited funds up front. As alleged, Hwang frequently entered into certain of these swaps without any economic purpose other than to artificially and dramatically drive up the prices of the various companies’ securities, which induced other investors to purchase those securities at inflated prices. As a result of Hwang’s trading, Archegos allegedly underwent a period of rapid growth, increasing in value from approximately $1.5 billion with $10 billion in exposure in March 2020 to a value of more than $36 billion with $160 billion in exposure at its peak in March 2021.
The complaint also alleges that, as part of the scheme, Archegos repeatedly and deliberately misled many of Archegos’s counterparties about Archegos’s exposure, concentration and liquidity, in order to get increased trading capacity so that Archegos could continue buying swaps in its most concentrated positions, thereby driving up the price of those stocks. Ultimately in March 2021, price declines in Archegos’s most concentrated positions allegedly triggered significant margin calls that Archegos was unable to meet, and Archegos’s subsequent default and collapse resulted in billions of dollars in credit losses among Archegos’s counterparties.
“Today, we charged Archegos Capital Management and affiliated individuals with committing fraud and manipulating stock prices using total return swaps. The collapse of Archegos last spring demonstrated how activities by one firm can have far-reaching implications for investors and market participants. I thank the SEC staff for taking swift action to hold these actors responsible for their alleged misconduct, which hurt investors across our capital markets,” said SEC Chair Gary Gensler. “The failure of Archegos underscores the importance of our ongoing work to update the security-based swaps market to enhance the investor protections, integrity, and transparency of this market. Further, I encourage prime brokers and other market participants to remain vigilant to the risks presented by counterparty relationships.”
“We allege that Hwang and Archegos propped up a $36 billion house of cards by engaging in a constant cycle of manipulative trading, lying to banks to obtain additional capacity, and then using that capacity to engage in still more manipulative trading,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “But the house of cards could only be sustained if that cycle of deceptive trading, lies and buying power continued uninterrupted, and once Archegos’s buying power was exhausted and stock prices fell, the entire structure collapsed, allegedly leaving Archegos’s counterparties billions in trading losses.”
The SEC’s complaint, filed in federal district court in Manhattan, charges Hwang and the other defendants with violating antifraud and other provisions of the federal securities laws. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties. The SEC also seeks to bar individual defendants from serving as a public company officer and director.
In parallel actions, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges for similar conduct, and the Commodity Futures Trading Commission (CFTC) announced civil charges.
The SEC’s ongoing investigation is being conducted by David Zetlin-Jones and Brian Fitzpatrick of the Asset Management Unit and Joshua Brodsky of the Complex Financial Instruments Unit, with assistance from Stephen Johnson of the New York Regional Office. It is being supervised by Andrew Dean and Dabney O’Riordan of the Asset Management Unit and Osman Nawaz of the Complex Financial Instruments Unit. The litigation will be led by Mr. Zetlin-Jones and Jack Kaufman. Additional assistance to the investigation was provided by Dennis Hamilton and Adam Yonce of the SEC’s Division of Economic and Risk Analysis. The SEC acknowledges the assistance and cooperation of the U.S. Attorney’s Office for the Southern District of New York, the FBI, and the CFTC.
Federal Reserve: Weak Practices in Banks with Exposure to $120 Billion Archegos Family Office
In November 2021, the United States Federal Reserve (Fed) released information on weak practices in banks with exposure to $120 billion Archegos family office, which operates like a hedge fund and causing $10 billion of trading losses to the world’s largest banks including Credit Suisse, UBS, Nomura, MUFJ and Morgan Stanley. According to the United States Federal Reserve Supervision and Regulatory Report, the collapse of Archegos family office had revealed weaknesses in margin practices and counter-party risk management at some firms. In the report, no banks were named but the Federal Reserve will be providing direct feedback to the financial institutions that would cause vulnerability in the financial system.
Archegos Family Office – $120 Billion Exposure
Credit Suisse which suffered a loss of $5.5 billion, had released a full investigative report, detailing the relationship, built-up to losses and revenue from Archegos Family Office. Archegos Family Office, Korean-American Bill Hwang family office which operates like a hedge fund, had total exposure of $120 billion in March 2021, causing $10 billion of trading losses to the world’s largest banks including Credit Suisse, UBS, Nomura, MUFJ and Morgan Stanley. Read More: Credit Suisse Report: Archegos Family Office Had $120 Billion Total Exposure
Related:
- Credit Suisse Share Price Down 53.6% YTD with Market Capitalisation of $11.9 Billion, In Restructuring after $120 Billion Archegos Family Office, $10 Billion Greensill Funds & Senior Executives Departures
- Credit Suisse Reached $32.5 Million Settlement Lawsuit for Misleading Shareholders on Strong Risk Management, Including Collapsed $120 Billion Archegos Family Office & $10 Billion Greensill Funds
- United States Prosecutors Filing: Archegos Family Office Misled Banks on Liquidity & Portfolio Concentration 6 Months Before Collapsed in March 2021, $1.5 Billion Assets to $160 Billion Exposure
- United States SEC Charges Archegos Family Office Bill Hwang, CFO, CRO & Head Trader for Market Fraud, $1.5 Billion Assets to $160 Billion Exposure
- Goldman Sachs & Morgan Stanley Sued for Archegos Family Office Insider Trading
- Credit Suisse Report: Archegos Family Office Had $120 Billion Total Exposure
- $20 Billion Archegos Leveraged on GSX Techedu & Founder Loses $14 Billion, Name Change to Gaotu on NYSE
- Credit Suisse Raises $1.92 Billion in Capital, $5.5 billion Losses from Archegos Family Office
- $20 Billion Archegos Leveraged on GSX Techedu & Founder Loses $14 Billion, Name Change to Gaotu on NYSE
- Credit Suisse, UBS, Nomura, MUFJ and Morgan Stanley Losses for Archegos Family Office Nears $10 Billion
- UBS Reports $861 Million Losses from Archegos Family Office, $4.2 Trillion AUM and $1.82 Billion Profit for Q1 2021
- Credit Suisse and Nomura in $6 Billion Hit by Bill Hwang Archegos Family Office
- HSBC UK Faces $1.61 billion Lawsuit for Tax-Efficient Disney Films Investments
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