![]() ![]() Hwang’s attorney, Lawrence Lustberg, said lawyers were “extremely disappointed” with a prosecution that they believe has “absolutely no factual or legal basis.” “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,” Grewal said. Over $100 billion in market value disappeared in days for nearly a dozen companies and banks and prime brokers duped by Archegos lost billions, the indictment said. ![]() The risky maneuvers made the firm’s portfolio highly vulnerable to price fluctuations in a handful of stocks, causing a flurry of margin calls in late March 2021 that had a destructive domino effect. “As a result, despite the size of Archegos’s positions, the investing public did not know that Archegos had come to dominate the trading and stock ownership of multiple companies,” the indictment said. He hid the extent of his market prowess from investors by using derivative securities that had no public disclosure requirement, it said. Hwang carried out the fraud from March 2020 to March 2021 by originally investing his personal fortune, which grew from $1.5 billion to over $35 billion, and later the investments he borrowed from major banks and brokerages, which grew from about $10 billion to over $160 billion, the indictment said. They face racketeering conspiracy and fraud charges. Both were expected to appear later in the day in court. The charges unsealed in an indictment in Manhattan federal court named Bill Hwang, the founder of Archegos Capital Management, and his former chief financial officer, Patrick Halligan. ![]()
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