Archegos founder behind US hedge fund crisis pleaded guilty to insider trading in 2012

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The man behind the New York-based company that brought $ 30 billion to the stock market is deeply religious, previously found guilty of insider trading, and was once considered so risky by Goldman Sachs that they refused to do business with him for years.

Bill Hwang, who is in his 50s and the son of a Korean pastor, is the founder and co-chief executive of Archegos Capital Management in New York.

Hwang’s company is at the center of the crisis that caused the shares of major investment banks Nomura and Credit Suisse to tumble after issuing profit warnings when Archegos failed to pay off margins last week.

Losses at Archegos led to a fire sale of stocks on Friday, and big loss warnings led to a sell-off of bank stocks around the world on Monday.

Hwang, who managed approximately $ 10 billion in family money through Archegos, is known for using excessive leverage to increase his bets in the US, European and Asian markets.

Bill Hwang, who is in his 50s and the son of a Korean pastor, is the founder and co-chief executive of Archegos Capital Management in New York.

Bill Hwang, who is in his 50s and the son of a Korean pastor, is the founder and co-chief executive of Archegos Capital Management in New York.

He was a former protégé of billionaire hedge fund manager Julian Robertson and previously worked as an equity analyst at Robertson’s Tiger Management.

Investors trained by Robertson – including Hwang – were often referred to as “Tiger Cubs” on Wall Street.

Hwang also previously worked as an institutional stock seller at both Peregrine Securities and Hyundai Securities.

He went on to create and run Tiger Asia in 2001 with the support of Robertston, who invested $ 25 million. The hedge fund, which was based in New York, tried to take advantage of bets on securities in Asia. It became one of the largest investors in Asian markets.

In 2012, Hwang pleaded guilty on behalf of his hedge fund to insider trading charges by the U.S. Securities and Exchange Commission.

His fund was found to have made $ 16 million in illegal profits between 2008 and 2009.

Hwang admitted that his fund repeatedly used insider information from investment banks to trade, and he and his company agreed to pay $ 44 million in 2012 to settle.

The SEC investigation has effectively declared Tiger Asia bankrupt.

In 2013, Hwang turned his fund into a family office and named it Archegos Capital Management to manage his private assets.

As a family office, Archegos is under no obligation to register with the SEC, even though it has billions of dollars in publicly traded US companies.

Despite having such a large portfolio, there is hardly any public information about Archegos’ financial disclosures.

Hwang, who managed approximately $ 10 billion in family money through Archegos, is known for using excessive leverage to increase his bets in the US, European and Asian markets.

Hwang, who managed approximately $ 10 billion in family money through Archegos, is known for using excessive leverage to increase his bets in the US, European and Asian markets.

Hwang, who managed approximately $ 10 billion in family money through Archegos, is known for using excessive leverage to increase his bets in the US, European and Asian markets.

Archegos Capital Management is located in this office on 7th Avenue in Midtown Manhattan

Archegos Capital Management is located in this office on 7th Avenue in Midtown Manhattan

Archegos Capital Management is located in this office on 7th Avenue in Midtown Manhattan

His past resulted in major bank Goldman Sachs refusing to do business with him, sources said Fortune

Goldman still refused to let Hwang or Archegos open an account with them until 2018.

A decade after his illegal transactions, Goldman allowed Hwang to do business with them again and eventually became one of the bank’s top clients.

In 2013, Hwang turned his fund into a family office and named it Archegos Capital Management to manage his private assets.  As a family office, Archegos is not required to register with the SEC, even though it has billions of dollars in publicly traded U.S. companies

In 2013, Hwang turned his fund into a family office and named it Archegos Capital Management to manage his private assets.  As a family office, Archegos is not required to register with the SEC, even though it has billions of dollars in publicly traded U.S. companies

In 2013, Hwang turned his fund into a family office and named it Archegos Capital Management to manage his private assets. As a family office, Archegos is not required to register with the SEC, even though it has billions of dollars in publicly traded U.S. companies

Goldman was one of the big banks to see its stocks fall on Monday. Like Goldman, shares in Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co fell between 1.6% and 2.5%. Shares in Morgan Stanley plummeted about 5% after reports that it had sold billions of shares.

Hwang attended high school in South Korea before moving to the United States after his senior year.

He has a bachelor’s degree in economics from the University of California and completed his MBA from Carnegie-Mellon University.

It is unclear if he has children, but it is believed that he has a wife named Becky.

Hwang, the son of a Korean pastor, is deeply religious and has previously suggested that God loves his investments in companies that have helped humanity.

In a 2018 interview, Hwang spoke about his early investment in LinkedIn and said the networking site helped people find jobs.

“I’m like a little kid looking for what I can do today, where can I invest, to please our God,” he said.

His past led to the large bank Goldman Sachs refusing to do business with him for years, the source said.  A decade after his illegal transactions, Goldman allowed Hwang to do business with them again and he eventually became one of the bank's top clients.

His past led to the large bank Goldman Sachs refusing to do business with him for years, the source said.  A decade after his illegal transactions, Goldman allowed Hwang to do business with them again and he eventually became one of the bank's top clients.

His past led to the large bank Goldman Sachs refusing to do business with him for years, the source said. A decade after his illegal transactions, Goldman allowed Hwang to do business with them again and he eventually became one of the bank’s top clients.

What is a margin call?

A margin call is when a bank asks a customer to post more collateral if a transaction that is partially financed with borrowed money has fallen sharply in value.

If the client can’t afford it, the lender sells the securities to try to recoup what he owes.

In this case, Archegos Capital would have defaulted on margin calls.

He is involved with several Christian organizations in the US and Asia, including the Grace and Mercy Foundation, which he co-founded.

Neither Hwang nor anyone at Archegos commented on the company defaulting on margin calls last week.

A margin call is when a bank asks a customer to post more collateral if a transaction that is partially financed with borrowed money has fallen sharply in value. If the client can’t afford it, the lender sells the securities to try to recoup what he owes.

Margin calls on Archegos Capital led to a massive settlement of leveraged equity betting.

Nomura and Credit Suisse are now facing billions of dollars in losses from Hwang’s firm default on margin calls, leaving investors tense about who else could have been caught.

Shares of ViacomCBS and Discovery each plunged about 27% on Friday, while US-listed shares of China-based Baidu and Tencent Music plummeted during the week, falling 33.5% and 48.5% respectively from the closing levels of Tuesday.

Bloomberg reported Monday that the leverage offered to Archegos by banks including Nomura and Credit Suisse was through swaps or contracts-for-difference, citing sources, meaning they didn’t have to disclose their holdings.

Investors were nervous about whether the full scale of Archegos’ apparent destruction has been realized or if more sales were to come.

The magnitude of banks ‘losses likely raises questions about banks’ supervision of their exposure to Archegos.

Hwang's company is at the center of the crisis that caused stocks of major investment banks Nomura and Credit Suisse to tumble after issuing profit warnings when Archegos defaulted on margin calls last week

Hwang's company is at the center of the crisis that caused stocks of major investment banks Nomura and Credit Suisse to tumble after issuing profit warnings when Archegos defaulted on margin calls last week

Hwang’s company is at the center of the crisis that caused stocks of major investment banks Nomura and Credit Suisse to tumble after issuing profit warnings when Archegos defaulted on margin calls last week

Nomura and Credit Suisse are now facing billions of dollars in losses from Hwang's firm default on margin calls, leaving investors tense about who else could have been caught.

Nomura and Credit Suisse are now facing billions of dollars in losses from Hwang's firm default on margin calls, leaving investors tense about who else could have been caught.

Nomura and Credit Suisse are now facing billions of dollars in losses from Hwang’s firm default on margin calls, leaving investors tense about who else could have been caught