Behind the Money

Was the Archegos implosion illegal?

May 8, 2024

FT's US legal correspondent Joe Miller discusses the Archegos scandal and the upcoming trial of founder Bill Hwang. Topics include racketeering, securities fraud charges, market manipulation, and the legal complexities of the case.

23:38

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Joe Miller

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Quick takeaways

Bill Hwang used risky equity swaps to manipulate markets, leading to a global financial crisis.

Legal complexities arose from Bill Hwang's exploitation of loopholes in financial regulations.

Deep dives

The Archegos Capital Management Implosion

In 2021, Archegos Capital Management, a family office run by Bill Wong, faced a dramatic implosion. Wong, previously associated with legal controversies in his hedge fund career, amassed huge stakes in various companies using risky equity swaps. These trades, while legal individually, collectively turned into a market manipulation scheme, resulting in billions of dollars of losses and a global financial crisis.

The Evolution of Archegos

01:10

Legal Techniques Turned Crime

01:28

Introduction

2min

The Rise and Fall of Archegos Capital Management

12min

Analysis of Bill Wong's Illegal Actions and Market Manipulation Charges

2min

Legal Defense Against Allegations of Illegal Trading

3min

The Archegos Scandal: Legal Complexity and Regulatory Implications

4min

Implications of a Not Guilty Verdict on Securities Fraud Cases

3min

Three years ago, chaos struck Wall Street. Companies saw their share prices tumble, seemingly out of nowhere. Major banks lost billions of dollars in the fallout. Eventually, that chaos was linked to a family office, Archegos Capital Management, and its founder Bill Hwang.

This week, Hwang heads to trial in New York, where he faces charges including racketeering, and securities and wire fraud. The FT’s US legal correspondent Joe Miller examines the “novel” case prosecutors plan to pursue.

Clips from CNBC, Fox Business

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For further reading:

‘To what end?’: the murky question of Bill Hwang’s motive in Archegos trial

Archegos founder’s charity was financial ‘escape pod’, suit alleges

Hedge funds and brokers take aim at post-Archegos trading reforms

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On X, follow Joe Miller (@JoeMillerJr) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.

Read a transcript of this episode on FT.com

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