There are plenty of unanswered questions following the recent meltdown of family office Archegos Capital Management—and plenty of compliance lessons to be learned.
Archegos is a hedge fund operated by billionaire Bill Hwang that reportedly lost $8 billion in less than two weeks in March. The firm had taken highly leveraged positions in several blue-chip stocks, including ViacomCBS. When ViacomCBS lost nearly half its value, Archegos’s risky bets backfired. The massive stock sell-off that followed caused billions in losses for some of Archegos’s largest lenders, most prominently Credit Suisse, which reported it lost $4.7 billion. In the aftermath, the bank launched an investigation and fired its chief risk and compliance officer.
