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The swift fall of Archegos Capital Management is one of the most embarrassing financial plotlines in years, not just for a handful of banks but for an entire financial and governance system that really shouldn’t have let any of this happen. Hwang used several banks to place leveraged bets on a handful of stocks in particular. Some significant portion of Hwang’s holdings was in swaps, which might have concealed both Hwang’s identity and the size of his holdings in certain stocks.
Which brings me back to my thesis: Archegos’ collapse is the dumbest financial thing that has happened all year. It features thousands of people, as well as several companies, taking on huge losses not because they did anything wrong, but because a handful of huge banks decided to bet on one shady securities trader with a demonstrable history of being a crook. A couple of those banks then exacerbated the crisis when, to cover their own asses, they quickly sold off their own ends of the deal and abandoned any pretense of a more orderly wind-down.
https://slate.com/business/2021/03/archegos-capital-management-dumbest-financial-story-2021.html
