May 27, 2022

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Archegos fund owner accused of 11 fraud and organized crime

This content was published on Apr 27, 2022 – 20:37

(updated with presentation of specific charges and words of the attorney general)

New York, April 27 (EFE). This Wednesday, a US federal court issued eleven counts of fraud and organized crime against Bill Huang, owner of Archegos, an investment fund that collapsed just over a year ago causing millions of dollars in losses. many financial institutions.

Archegos financial advisor Patrick Halligan was also accused of the same crimes, although both pleaded not guilty in their first appearances before Judge Jennifer Willis, after their arrest in the early hours of the morning, according to the Wall Street Journal. .

Hwang and Halligan set up an alleged plot to manipulate the stock price of Archegos’ portfolio and defraud investment banks, actions that allowed the fund’s portfolio to go from $1.5 billion to about $35 billion in one year. prosecution.

Archegos’ business collapsed in March of last year, affecting key entities such as Credit Suisse, Nomura, UBS and Morgan Stanley, which were forced to rush to liquidate their fund-related interests and lost millions of dollars.

“Lies fueled inflation, and inflation fueled more lies. In the past year, the music has stopped, the bubble has burst, prices have collapsed, and billions of dollars have evaporated overnight,” Manhattan Attorney General Damien Williams said today in a public appearance.

The scandal once again put on the table the risks of derivative financial products, which were already behind the Lehman Brothers crisis, as Archegos used these tools as an essential part of its strategy.

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This isn’t the first time Hwang has been embroiled in controversy, as the millionaire investor has already been denounced for insider trading when he was director of Tiger Asia, for which he has paid a $44 million fine.

Hwang, who made his fortune after the “Asian Tiger” crisis in the 1990s, returned to Wall Street with Archegos Capital Management, his personal investment arm that operated covertly thanks to derivatives tools that allowed him to take huge positions in listed companies without having to acquire brokered securities. Affected investment banks, which in turn collected large commissions. EFE

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