Last year, Bill Hwang lost more than $20 billion in two days. But even inside the finance world, hardly anybody had ever heard of the guy. KevinTDugan reports on Hwang's arrest this morning — and how his rise and fall happened
Photo: Emile Wamsteker/Bloomberg via Getty Images The story of Bill Hwang is the kind you used to see in the years after the financial crisis. Here was something of a self-made man, emigrated from Korea, who got rich — like, $30 billion in the bank rich. There was, naturally, a trail of insider-trading accusations and wire-fraud charges against him from his days as a trader. He’d rebuilt himself through a lightly regulated hedge-fund-like firm, Archegos Capital Management.
The whole Hwang saga shows just how much of Wall Street remains shrouded in secrecy 12 years after the Obama administration passed its landmark Dodd-Frank regulatory overhaul. In the parlance of Wall Street, Archegos — a Greek word for “one who leads the way” — was not a hedge fund but a “family office.” Family offices act in ways that can be indistinguishable from any hedge fund, but because the managers are investing their own funds, they are more lightly regulated.
Things collapsed last March. At the time, Archegos’s position in ViacomCBS was so large that it was the equivalent of half of all of the company’s outstanding shares, even though, on paper, it would have been a minor investor, according to the indictment. During the previous year, the company’s shares had exploded by more than 600 percent — in part because of allegedly manipulative trading by Archegos.
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