In a statement, Gary Gensler, the S.E.C. (This story was originally published on April 8, 2021. The sales knocked around $35 billion off the value of various US media and Chinese tech firms in a day. Hwang, a former protege of noted Tiger Management founder Julian Robertson, ran family office Archegos Capital Management, which was so under-the-radar that he wasn't even initially spotted as. Trading at roughly $12 a little over a year ago, ViacomCBSs stock rose to about $50 by January. Web page addresses and e-mail addresses turn into links automatically. He was banned from managing clients' money in the US for five years. [8], In 2012,[13] Hwang closed Tiger Asia Management, and opened a family office, Archegos Capital Management,[2] which managed US$10 billion of family money. ViacomCBS saw its share price halved in a week. Bill Hwang lost $8 billion in 10 days during the Archegos meltdown The Dumbest Financial Story of 2021 - Slate Magazine It didnt work, and Archegoss leadership team prepared for margin calls the next day. But in his investing approach, he embraced risk and his firm ran afoul of regulators. [8] On April 27, 2022, Hwang and his former top lieutenant, Patrick Halligan, were arrested and charged with racketeering conspiracy, securities fraud, and wire fraud as part of scheme to harm investors. His decision caused the ViacomCBS fund-raising effort to end with $2.65 billion in new capital, significantly short of the original target. Credit Suisse breach spills personal info of high-net-worth clients . [17] Hwang was released on a $100 million bond, which was secured by two properties and $5 million in cash. [2] Robertsons former protgs are known as the Tiger Cubs, and Hwang was considered one of the most successful among them. "This does raise questions about the regulation of family offices once again," said Tyler Gellasch, a former SEC aide who now runs the Healthy Markets trade group. Archegos' Founder Bill Hwang's Net Worth Is Something of a Mystery Damian Williams, U.S. attorney for the Southern District of New York, descibed the Archegos case in a news conference Wednesday. Some banks weren't so fast, however, with Credit Suisse and Nomura left nursing estimated losses of $4.7 billion and $2 billion respectively. Hwang, the enigmatic billionaire behind Archegos, had amassed one of the worlds great fortunes in virtual secrecy, and that trove -- a staggering $160 billion position in stocks -- was unraveling everywhere, all at once. His hedge fund Archegos Capital Management ballooned on successful bets on global tech firms. Hwang took what remained from the collapse of Tiger Asia and opened Archegos in 2013. The deputys words, now immortalized in a federal indictment, said it all: Inside Bill Hwangs Archegos Capital Management, panic was setting in. Bankers reckon that Archegos's net capital -- essentially Hwang's wealth -- had reached north of $10 billion. More than $100 billion in apparent market value for nearly a dozen companies disappeared within days, the government said. Registered in England and Wales. By mid-March, Mr. Hwang was the financial force behind $20 billion in shares of ViacomCBS, effectively making him the media companys single largest institutional shareholder. The SEC also charged Archegos's Chief . Li and Teng Yue havent been accused of wrongdoing by U.S. authorities, and Teng Yue didnt respond to messages seeking comment. Even as his fortune swelled, the 50-something kept a low profile. Mr. Hwang, who appeared in court with chin-length salt-and-pepper hair swept behind his ears, was released on a $100 million bond, secured by $5 million in cash and two properties. "All plans are being discussed as Mr. Hwang and the team determine the best path forward.". The Securities and Exchange Commission said its civil complaint, also unveiled Wednesday, that when combining its equity and derivative stakes, Archegos accumulated exposures equal to more than 70% of the outstanding shares in GSX Techedu Inc., 60% of Discovery Communications and 50% of IQIYY Inc. and Discovery Inc. In a 2006 interview, Robertson said (via Al Jazeera) of Hwang: He was the best salesman we had. Bill Hwang Net Worth of $10 Billion - Money Inc Other banks soon followed. Bill Hwang is an American New York-based investor on Wall Street. Hoping to buy time, Archegos called a meeting with its lenders, asking for patience as it unloaded assets quietly, a person close to the firm said. Despite once working for Robertson's Tiger Management, he wasn't well-known on Wall Street or in New York social circles. In its civil complaint, the S.E.C. Li also bet heavily on GSX. He also seeded funds run by Cathie Woods Ark Investment Management. [8], On April 27, 2022, Hwang and his former top lieutenant, Patrick Halligan, were arrested and charged with racketeering conspiracy, securities fraud, and wire fraud as part of scheme to harm investors. [2][3] The Wall Street Journal reported that Hwang lost US$20billion over 10 days in late March 2021, imposing large losses on his bankers Nomura and Credit Suisse. Bill Hwang, the man behind Archegos Capital Management, also suffered a staggering $8 billion dollars in 10 days one of the fastest losses of that size traders have ever seen, The Wall Street Journal reported. The full picture of his holdings is still emerging, and it's not clear what positions derailed, or what hedges he had set up. I always blame people who set up U.C.L.A. One Of World's Greatest Hidden Fortunes Crashed In Days. How It Happened Mr. Hwang, a 57-year-old veteran investor, managed $10 billion through his private investment firm, Archegos Capital Management. Copyright 2023 MarketWatch, Inc. All rights reserved. He and his mother moved to Los Angeles, where he studied economics at the University of California, Los Angeles, but found himself distracted by the excitement of nearby Santa Monica, Hollywood and Beverly Hills. But among the most enduring elements of its collapse is the way it inspired federal regulators to dig into the way Wall Street went about unwinding Hwangs massive portfolio. Hwang is a trustee of the Fuller Theology Seminary, and co-founder of the Grace and Mercy Foundation, whose mission is to serve the poor and oppressed. Hwang, the billionaire behind Archegos Capital Management, is facing 380 years in prison. He also loaded up on Chinese tech companies such as Baidu and GSX Techedu. Archegos Latest: Bill Hwang Get $100 Million Bail, Pleads Not guilty Tom Sizemore dead at 61 after brain aneurysm . Mr. Hwang kept amassing his stake, people familiar with his trading said, through complex positions he arranged with banks called swaps, which gave him the economic exposure and returns but not the actual ownership of the stock. Just before Archegos' epic collapse in late March, Hwang was managing a portfolio valued at between $10 billion and $15 billion, Wall Street traders estimate. Hwang had other ideas, instead encouraging traders to use the last of the firms cash to manipulate certain stocks to prop up their price. In 2012, after years of investigations, the U.S. Securities and Exchange Commission accused Tiger Asia of insider trading and manipulation of Chinese bank stocks. Source: Vimbuzz.com. As bankers canvassed the investor community, they were counting on Mr. Hwang to be the anchor investor who would buy at least $300 million of the shares, four people involved with the offering said. Most of the money used for those investments came from lenders like Goldman Sachs, Morgan Stanley, and Credit Suisse. When the risky strategy collapsed in just a few days in March 2021, $100 billion in shareholder value vanished, hitting the portfolios of investors who had invested when the unseen hand of Archegos was pushing those stocks to new heights. Ashlee Vance explores innovations in new tech, software, engineering, and science in places outside of Silicon Valley. Bill Hwang borrowed heavily from Wall Street banks to become the single largest shareholder in ViacomCBS. Mr. Hwang was barred from managing public money for at least five years but was still able to invest his own fortune. Hwang, who founded Archegos as a family office in 2013, used borrowed money to make large bets on some stocks until Wall Street banks forced his firm to sell over $20 billion worth of shares after failing to meet a margin call, hammering stocks including ViacomCBS and Discovery. The meltdown of Mr. Hwangs firm had ripple effects. Biography He graduated barely, he said and pursued a master of business administration at Carnegie Mellon University in Pittsburgh. Bill Hwang, who ran the fund that below up on Friday, also co-founded the Grace and Mercy Foundation. JPMorgan refused. Family offices that invest money of a small circle of insiders are lightly regulated. Bill Hwang Net Worth 2022, Age, Wife, Children, Height - Apumone Bill Hwang, the man behind Archegos Capital Management, also suffered a staggering $8 billion dollars in 10 days one of the fastest losses of that size traders have ever seen, The Wall Street. Washington D.C., April 27, 2022 . "It's not all about the money, you know," he said in a rare interview with a Fuller Institute executive in 2018, in which he spoke about his calling as an investor and his Christian faith. complaint said that Mr. Becker, the former chief risk officer at Archegos, and Mr. Tomita, the firms former top trader, had typically led discussions with the banks about the firms trading positions but that Mr. Hwang and Mr. Halligan had directed and set the tone for those discussions. This is the second time Mr. Hwang has run into trouble with regulators. Bloomberg cited people familiar with Hwang's investments. Federal prosecutors said Hwang used Archegos as an instrument of market manipulation and fraud, inflating its portfolio from $1.5 billion to $35 billion before its spectacular collapse, causing massive losses for banks and investors.). Before the losses, Hwang was believed to be worth $10-15 billion with his investments leveraged 5:1. In the end, the losses from Archegos swept across the globe as banks were forced to dump large blocks of stock into the market. Lines and paragraphs break automatically. Lee said Hwang, who he has known for many years, is "easily in the top 10 of the best investment minds" that he knows. He increasingly ignored internal Archegos analyst research throughout 2020 and 2021, after previously holding weekly strategy meetings, according to the charging documents. Archegos made swaps deals with a number of banks including Credit Suisse, Nomura, Morgan Stanley and UBS, and prosecutors said Mr. Hwang, Mr. Halligan and others at the firm had made materially false and misleading statements to conceal the extent of its bets. One part of Hwang's portfolio, which has been traded in blocks since Friday by Goldman Sachs Group Inc., Morgan Stanley and Wells Fargo & Co., was worth almost $40 billion last week. Bill Hwang built up a fortune of around $20 billion through savvy investments, but then lost it all in 2 days in March as his Archegos investment fund imploded after some of his bets went awry, a report has said. Because he was using borrowed money and levering up his bets fivefold, Hwang's collapse left a trail of destruction. Read more: Its a sign of me buying. Inside the indictment of Archegos owner Bill Hwang, The DOJ complaint alleges that Hwang worked to defend the prices of stocks that were facing negative press or market movements.. A year after the collapse of Archegos sent shock waves through global finance, Hwang was arrested Wednesday morning and, for the first time, federal prosecutors offered an official account of what really happened at the secretive family office. It takes a lot of malfeasance for giant banks to do something in 2021 that would make a neutral observer think, Wow, it's legitimately shocking they did that. Bloomberg the Company & Its Products Bloomberg Terminal Demo Request Bloomberg Anywhere Remote Login Bloomberg. But he soon turned to smaller companies, including a handful of Chinese ADRs. Hwang graduated with a degree in Economics from the University of California at Los Angeles in 1988. Amid the largest meltdown of a firm Wall Street has witnessed since the global financial crisis, it wasn't just banks that lost billions. Its a tale as old as Wall Street itself, where the right combination of ambition, savvy and timing can generate fantastic profits only to crumble in an instant when conditions change. Authorities said Mr. Becker and Mr. Tomita had understood that if they were truthful with the banks about the amount of risk that Archegos was taking on, the financial institutions would not keep arranging new derivatives trades for it. By Thursday's close, the value of the portfolio fell 27% -- more than enough to wipe out the equity of an investor who market participants estimate was six to eight times levered. Credit Suisse breach spills info of high-net-worth clients Hwang created and ran Tiger Asia with the support of Julian Robertson who invested $25 million in the company. Hwang's most recent ascent can be pieced together from stocks dumped by banks in recent days -- ViacomCBS Inc., Discovery Inc. GSX Techedu Inc., Baidu Inc. -- all of which had soared this year, sometimes confounding traders who couldn't fathom why. No more changing the clocks? https://www.nytimes.com/2021/04/03/business/bill-hwang-archegos.html. [8] Tiger Asia suffered heavy losses in the Great Recession. The agency said Hwang crossed the wall, receiving confidential information about pending share offerings from the underwriting banks and then using it to reap illicit profits. [12] Hwang's offices are located in Manhattan. Most if not all of it was his own. as well as other partner offers and accept our, billionaire hedge fund pioneer Julian Robertson, Registration on or use of this site constitutes acceptance of our. How Bill Hwang and Archegos Lost $20 Billion Wealth The Big Take The Man Who Lost $20 Billion in Two Days Is Lying Low in New Jersey About 15 miles from midtown Manhattan, the head of. [4] On April 27, 2022, he was indicted on federal charges of fraud and racketeering in the same matter. The heavy borrowing ballooned Mr. Hwangs portfolio to $35 billion from $1.5 billion in a single year, prosecutors said, and the effective size of his firms stock positions swelled to $160 billion rivaling some of the biggest hedge funds in the world. Bill Hwang: Billionaire Archegos founder lived 'modestly' despite once Bill Hwang Net Worth (2023) - SuccessTitan +17.54% Some employees also worked for a large charitable foundation Mr. Hwang established the Grace and Mercy Foundation that gave to many religious causes.