Dean Seal, 08 April 2021
The chairman of the Senate Banking Committee is asking Credit Suisse, Goldman Sachs and other Wall Street giants that brokered for Bill Hwang’s Archegos Capital Management to explain their involvement in the fund’s high-profile collapse.
In letters released Thursday, Sen. Sherrod Brown, D-Ohio, told higher-ups at the Swiss bank, Goldman, Morgan Stanley and Nomura that he was “troubled, but not surprised” that risky derivatives transactions between the banks and Hwang’s generally unregulated family office were connected to a shocking multibillion-dollar firesale on stocks in late March.
Brown is specifically seeking information about the margin calls from the banks that Archegos was reportedly unable to meet on March 26 and the subsequent liquidation of the fund’s highly leveraged positions in blue-chip stocks.
“The details and ultimate consequence of Archegos’s failure remain to be seen, but the massive transactions, and losses, raise several questions regarding Goldman Sachs’s relationship with Archegos and the treatment of so-called ‘family offices,’ Mr. Hwang’s history, and the transactions that have been mentioned in news reports,” Brown said in his letter to Goldman.