The founder of US hedge fund Archegos Capital Management, Bill Huang, and CFO Patrick Halligan, have been arrested on suspicion of fraud and market manipulation.
About a year ago, the multi-billion dollar fund collapsed, faced with losses in units purchased with borrowed money. This, in turn, has caused huge losses to banks, investors and their employees. Credit Suisse and Morgan Stanley, among others, have incurred billions of dollars in losses.
The court accuses Hwang of using the fund as a “tool for market manipulation and fraud”. The 57-year-old businessman was arrested on Wednesday along with his chief financial officer. They will have to appear in court in Manhattan, New York. The Securities and Exchange Commission has filed a civil complaint.
Hwang’s lawyer defends his innocence. “There is no evidence of any crime,” Lawrence Lustberg said. According to his lawyer, Hwang is also cooperating smoothly with the investigation.
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