U.S. Justice Department starts probe on Archegos collapse – Bloomberg News

The U.S. Department of Justice is investigating the collapse of Bill Hwang’s Archegos Capital Management, which cost big global banks more than $10 billion in losses, Bloomberg News reported on Wednesday.

Federal prosecutors in Manhattan sent requests for information to some banks that had worked with the investment firm, the report said, citing people familiar with the matter.

It is unclear what potential violations or entities were being examined, the report added

Archegos, a family office run by ex-Tiger Asia manager Bill Hwang, defaulted on margin calls in March, which left banks nursing heavy losses after a fire sale of shares, including ViacomCBS (VIAC.O) and Discovery Inc (DISCA.O), had been meant to act as collateral. read more

Credit Suisse (CSGN.S) lost more than $5 billion and Japan’s Nomura (8604.T) lost almost $3 billion. U.S. banks such as Goldman Sachs (GS.N), which also acted as brokers for Archegos, suffered much lower losses.

A spokesperson for the U.S. attorney’s office in Manhattan declined to comment. Archegos could not be reached for a comment.

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/business/finance/us-justice-department-starts-probe-archegos-collapse-bloomberg-news-2021-05-27/

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