US authorities have accused Archegos Capital Management founder Bill Huang of fraud in the latest developments in the spectacular collapse of the family office that upset Wall Street last year.
According to Bloomberg, the US federal authorities reported that Huang used Archegos as an “instrument of fraud and market manipulation”, causing billions of dollars in losses to banks, investors, financial markets and its employees.
In this context, Huang was arrested by federal agents today. Wednesday. Along with Huang, accusations were made against Archegos CFO Patrick Hulligan.
The two men face a total of 11 criminal charges, including conspiracy to extort money, market manipulation, remittance fraud and title fraud.
The two men artificially inflated Archegos’s portfolio from $ 1.5 billion to $ 35 billion in one year, Manhattan District Attorney Damian Williams said in a statement.
The indictment alleges that Archegos’s total market position at some point reached $ 160 billion through deceptive trading tactics that hid their true size.
The placements “inflated” with the use of borrowed money and derivatives that did not require public information. When the market sorted out these positions in March 2021, Huang asked the Archegos traders to proceed to mass purchases in an attempt to support the price of the assets, according to the accusations.
Huang’s family office collapsed after the loss of some shares in the portfolio, which triggered margin calls and completely destroyed Archegos’s positions.
At the same time, banks lost more than $ 10 billion, which led to the departure of several executives and investigations into how hedge funds are monitored.
U.S. authorities say the two men used Archegos to defraud the market by “manipulating, controlling and artificially influencing the value of certain securities in the Archegos portfolio.”
They also “repeatedly made false and misleading statements about Archegos’s portfolio of securities to many investment banks and stock exchanges,” which encouraged lending to the fund.
Source: Capital
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