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Destroyed Credit Suisse and manipulated share prices, and now awaits the verdict (traders.lt)

Sunaikino Credit Suisse ir manipuliavo akcijų kainomis, o dabar laukia nuosprendžio (traders.lt)

The process, in which the founder of the Archega Foundation played a leading role, lasted two months and electrified Wall Street. It ended on Wednesday and the verdict will be announced on October 28.

Archegos Capital founder Bill Hwang and former chief financial officer Patrick Halligan defrauded partners including major Swiss banks Credit Suisse and UBS, leading to the collapse of their firm three years ago, a federal court in Manhattan found Wednesday.

Hwang and Halligan lied to partners about their firm's trading activities and the level of risk in their investment portfolio. The founder of Archegas (Greek for leader) was found guilty of manipulating share prices in a separate trial.

Both defendants are also guilty of participating in a conspiracy to commit extortion. They face a maximum sentence of 20 years in prison for each crime. The verdict will be announced on October 28. Hwang and Halligan remain at large. The former posted $100 million in bonds, secured by $5 million in cash, and the latter by $1 million in bonds.

According to prosecutors, Hwang's actions boosted the value of the Archega family company to about $36 billion. dollars, but in March 2021, the drop in Viacom's market value, which led to the sale of shares, drowned Archegos. Business partners lost about 10 billion dollars, and the collapse of Archega turned out to be one of the main reasons for the big problems of Credit Suisse, which was supposed to be taken over by UBS.

Both Archega's spectacular success and its collapse have taken the financial world by surprise, and the losses suffered by major banks have raised questions about how they assess the risk of lending to their clients' trading activities. At the time, Hwang and Arechegos were not well known on Wall Street, Bloomberg notes.

Hwang founded Archegos in 2013, and seven years later he managed $10 billion. dollars. He previously worked at the Tiger Foundation. In 2012, Tiger Asia Management pleaded guilty to insider trading in Chinese bank stocks and paid $44 million. dollars. In 2014, Hwang was banned from trading in Hong Kong for four years.

Archega's assets were mainly instruments called swaps. They were based on shares held by banks, so Hwang's fund did not have to disclose its true position. Archegos was highly leveraged, meaning they used borrowed money.

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