Hedge fund managers face trial following the massive Archegos collapse worth billions | Lifestyle

The trial of Bill Hwang, the founder of Archegos Capital Management, began on Monday in New York City, with prosecutors accusing him of orchestrating a massive fraud scheme that cost leading global investment banks and brokerages billions of dollars.

Hwang, along with his former CFO Patrick Halligan, is facing charges of artificially inflating stock prices and deceiving banks to secure billions of dollars in funding for his private investment firm. Prosecutors allege that Hwang used these funds to manipulate the stock market and grow his portfolio from $10 billion to $160 billion.

Assistant U.S. Attorney Alexandra Rothman painted Hwang as a greedy individual who was willing to resort to fraud in order to achieve his goal of becoming a Wall Street legend. She described Hwang’s actions as “a house of cards, built on manipulation and lies,” and accused him of rigging the game to keep winning on Wall Street.

However, Hwang’s defense attorney, Barry Berke, argued that his client was not guilty and had not made any misrepresentations to the banks. Berke portrayed Hwang as a fearless investor who was willing to take risks and stand by his investment choices, even if it meant losing everything.

The trial also revealed that Hwang’s risky trading strategies made his firm’s portfolio highly vulnerable to price fluctuations, leading to margin calls in March 2021 that wiped out over $100 billion in market value in just a few days. Several companies, banks, and prime brokers were duped by Archegos and suffered significant losses as a result.

Despite the allegations against him, Hwang has maintained his innocence and continues to deny any wrongdoing. He has been free on $100 million bail, while Halligan, his former CFO, has been free on $1 million bail.

The trial is expected to shed light on the inner workings of the hedge fund industry and the risks associated with high-stakes trading. It also serves as a cautionary tale for investors and financial institutions about the importance of due diligence and transparency in the financial markets.

As the trial unfolds, the financial world will be watching closely to see how the case against Hwang and Halligan plays out and what implications it may have for the future of hedge fund regulation and oversight. Stay tuned for updates on this developing story.