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Top Archegos investment duo charged with fraud after early-morning US raid | Business


US prosecutors charged the founder and chief monetary officer of collapsed investor Archegos Capital Administration with fraud on Wednesday morning in a transfer that’s more likely to begin one of many largest Wall Road white-collar prosecutions in years.

Archegos founder Invoice Hwang and his former prime lieutenant, Patrick Halligan, had been arrested at their houses and are anticipated to look in court docket later right now.

The family-owned funding firm imploded final 12 months – dropping $20bn in simply two days – and inflicting billions in losses for banks, traders and its personal staff.

Federal authorities charged Hwang with 11 legal counts, together with racketeering conspiracy, market manipulation and securities fraud and accused him of utilizing Archegos as an “instrument of market manipulation and fraud” which had “far-reaching consequences for other participants in the United States securities markets”.

Their alleged crimes inflated the worth of Archegos’s holdings from $1.5bn to $35bn in a single 12 months, based on an announcement from Manhattan US lawyer Damian Williams.

Archegos had relied on borrowed cash to construct its portfolio. When inventory markets turned in opposition to them, the scheme collapsed.

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