The criminal convictions of Bill Hwang and Patrick Halligan for fraud in the collapse of Archegos, the $36 billion family office/hedge fund, tells banks two things: Something like this should never happen again, and there’s no way to guarantee this will never happen again.
The fund imploded in March 2021 after it made huge, market driving bets on a handful of stocks and one of them, ViacomCBS Inc., used the unexplained run-up in its share price to launch a $3 billion capital raise. Its stock price slipped and began the downward spiral of margin calls and share sales that destroyed Archegos in a matter of days.