The founder of the American hedge fund Archegos Capital Management, Bill Hwang, and financial director Patrick Halligan, have been arrested on suspicion of fraud and market manipulation.
About a year ago, the multi-billion dollar fund imploded, faced with losses on units bought with borrowed money. This in turn caused huge losses for banks, investors and their own employees. Banks Crédit Suisse and Morgan Stanley, among others, suffered billions 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 financial director. They will have to appear in court in Manhattan, New York. The SEC filed a civil complaint.
Hwang’s lawyer pleads innocent. “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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