The Department of Justice has opened a probe into Archegos Capital Management, which fall out March sent shockwaves through the market and left large banks with more than $ 10 billion in losses.
The department has requested information from a number of banks that have acted as the main office counterparts of the family office, according to two people familiar with the matter. It was not clear what information the prosecutors were looking for or whether the department would prosecute criminal charges.
The DoJ declined to comment. Archegos did not immediately respond to a request for comment.
Archegos, managed by former hedge fund manager Bill Hwang, did highly exploited bet on a small number of stock prices, using derivatives called total return swaps. She was forced to close trades in March after stock prices turned against her, prompting margin calls from her main brokers which failed.
The company’s main brokers have unloaded more than $ 25 billion in stock during the relaxation. Banks including Nomura, Credit Suisse and Morgan Stanley have accumulated losses of more than $ 10bn.
The fall of Archegos has raised questions about how family offices are regulated. He also turned the focus on primary brokers who were willing to build relationships with Hwang even though it was under a trading ban in Hong Kong and had previously reached a major settlement with U.S. regulators to resolve the issue. initial trade charges.
The Securities and Exchange Commission and the chairman of the U.S. Senate banking committee have also demanded information surrounding the collapse of Archegos.
Bloomberg reported earlier on the DoJ investigation.