Article: Morgan Stanley reveals nearly $1B loss from Archegos implosion

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Morgan Stanley reveals nearly $1B loss from Archegos implosion

Reuters, 16 April 2021

Morgan Stanley lost nearly $1 billion from the collapse of family office Archegos Capital Management, the bank said Friday, muddying its 150 percent jump in first-quarter profit that was powered by a boom in trading and deal-making.

Morgan Stanley was one of several banks that had exposure to Archegos, which defaulted on margin calls late last month and triggered a fire sale of stocks across Wall Street. Continue reading “Article: Morgan Stanley reveals nearly $1B loss from Archegos implosion”

Article: Gary Gensler has a full agenda as he gets set to take over the SEC

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Gary Gensler has a full agenda as he gets set to take over the SEC

Bob Pisani, 14 April 2021

(The Senate is expected to confirm Gary Gensler as the new chairman of the Securities and Exchange Commission on Wednesday, and crypto assets — including bitcoin — are likely high on his agenda.

With Democrats in control of all three major branches of government, and the SEC commissioners now with a 3-2 Democratic majority, Gensler is likely to face calls from progressives to act on several fronts, including ESG, the Gamestop fallout, the Archegos fiasco, payment for order flow, fiduciary obligations, and especially regulations around securities in the crypto space, including a bitcoin ETF.

A Senate vote on Gensler’s nomination is scheduled for 11:45 a.m. ET. Continue reading “Article: Gary Gensler has a full agenda as he gets set to take over the SEC”

Article: Archegos Exposes SEC Blind Spots, Dithering on Market Oversight

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Archegos Exposes SEC Blind Spots, Dithering on Market Oversight

Robert Schmidt and Benjamin Bainx, 10 April 2021

The U.S. Securities and Exchange Commission was supposed to be able to spot a whale like Bill Hwang by now. As the financial world knows, it didn’t. Will the agency be able to catch the next one?

The collapse of Hwang’s Archegos Capital Management represents one of the most spectacular failures of risk-management and oversight in recent memory. For the SEC, it caps a decade of foot-dragging on protections that were meant to avert, or at least minimize, just such a blowup. Continue reading “Article: Archegos Exposes SEC Blind Spots, Dithering on Market Oversight”

Article: Senate Banking Chair Probes Banks Over Archegos Collapse

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Senate Banking Chair Probes Banks Over Archegos Collapse

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. Continue reading “Article: Senate Banking Chair Probes Banks Over Archegos Collapse”

Article: Can Credit Suisse Avoid Becoming The ‘Deutsche Bank’ Of Switzerland?

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Can Credit Suisse Avoid Becoming The ‘Deutsche Bank’ Of Switzerland?

TYLER DURDEN, 08 April 2021

Markets were shaken but unstirred by the collapse of Greensill and the Archegos unwind trades. Credit Suisse is the ultimate loser of the two scandals – reputationally damaged and holed below the water line. The bank is paying the price of years of flawed management, poor risk awareness. and its self-belief it was still a Tier 1 global player. Its’ challenge is to avoid becoming the Deutsche Bank of Switzerland – which it will struggle to do without a radical and unlikely shakeout. Continue reading “Article: Can Credit Suisse Avoid Becoming The ‘Deutsche Bank’ Of Switzerland?”

Article: Is Another Family Office Blowing Up: JPM Dumps 9MM Share Block Of ASO After Hours

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Is Another Family Office Blowing Up: JPM Dumps 9MM Share Block Of ASO After Hours

TYLER DURDEN, 07 April 2021

In the aftermath of the Archegos blow up, the biggest nightmare on Wall Street – where there is never just one cockroach – is that (many) more Archegos-style, highly levered “family office” blow ups are waiting just around the corner.

Well, in a transaction after the close that is sure to spark much heated controversy tonight and tomorrow morning, Bloomberg announced that JPMorgan was offering a 9 million block of Academy Sports and Outdoors (ASO) stock. Since this is virtually identical to what happened two Fridays ago when similar public BWICs by Goldman and other banks proceeded to unwind the Archegos portfolio, the immediate question on everyone’s lips is whether a second highly levered family office has blown up. Continue reading “Article: Is Another Family Office Blowing Up: JPM Dumps 9MM Share Block Of ASO After Hours”

Article: Fallout From Greensill Collapse Splatters British Government, Leaves Taxpayers With Big Losses

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Fallout From Greensill Collapse Splatters British Government, Leaves Taxpayers With Big Losses

TYLER DURDEN, 07 April 2021

The collapse of UK-based supply chain finance firm Greensill Capital continues to reverberate. In Germany the private banking association has paid out around €2.7 billion to more than 20,500 Greensill Bank customers as part of its deposit guarantee scheme after the bank collapsed in early March. But the deposits of institutional investors such as other financial institutions, investment firms, and local authorities are not covered. Fifty municipalities are believed to be nursing losses of at least €500 million. Continue reading “Article: Fallout From Greensill Collapse Splatters British Government, Leaves Taxpayers With Big Losses”

Article: Goldman Bought $100M Of Deliveroo Shares During “Worst IPO Ever”…And Still Made Money

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Goldman Bought $100M Of Deliveroo Shares During “Worst IPO Ever”…And Still Made Money

TYLER DURDEN, 07 April 2021

Goldman Sachs managed to avoid billions of dollars in potential losses from the implosion of highly levered hedge fund Archegos Capital Management by breaking ranks with other syndicate banks to dump large blocks of shares representing Archegos’s exposure to a coterie of tech and media names. When the dust settled, the bank told shareholders any losses would be insignificant, while Credit Suisse, the bank with perhaps the biggest exposure, said Tuesday it has booked a nearly $5 billion loss. Continue reading “Article: Goldman Bought $100M Of Deliveroo Shares During “Worst IPO Ever”…And Still Made Money”

Article: “A Gigantic Clusterf**k”: How Morgan Stanley Avoided $10BN In Archegos Losses By Selling First

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“A Gigantic Clusterf**k”: How Morgan Stanley Avoided $10BN In Archegos Losses By Selling First

TYLER DURDEN, 07 April 2021

One week ago, in our initial take on the biggest hedge fund collapse since LTCM, we explained that – in our view – the catalyst for the failure of the Archegos hedge fund, which had as much as 10x leverage allowing it to hold some $100BN in positions, was Morgan Stanley and Goldman breaking ranks with their fellow prime brokers, and sparking the biggest margin call since Lehman and AIG.

Turns out we were right. Continue reading “Article: “A Gigantic Clusterf**k”: How Morgan Stanley Avoided $10BN In Archegos Losses By Selling First”

Article: People moves: facing the funds fallout music, CS changes chairs, and more

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People moves: facing the funds fallout music, CS changes chairs, and more

Natasha Rega-Jones, 07 April 2021

Credit Suisse faces some tough choices as it absorbs the extraordinary losses inflicted by the Greensill and Archegos fund fiascos and subsequent ratings hit. On April 6, the firm announced an estimated pre-tax loss of approximately Sfr900 million ($963 million) for the first quarter, including a charge of Sfr4.4 billion ($4.7 billion) in respect of Archegos. At the same time, the firm announced that investment bank CEO Brian Chin and chief risk and compliance officer Lara Warner were stepping down from their roles with immediate effect.

Christian Meissner, co-head of wealth management banking advisory and vice-chair of investment banking, will replace Chin in May. Meissner was previously head of global corporate and investment banking at Bank of America Merrill Lynch, and earlier co-CEO for EMEA at Lehman Brothers. Continue reading “Article: People moves: facing the funds fallout music, CS changes chairs, and more”

Article: After Taking $4.7 Billion Hit, Credit Suisse Executives Step Downs

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After Taking $4.7 Billion Hit, Credit Suisse Executives Step Downs

Alicia McElhaney, 06 April 2021

The hits keep coming for investment banking giant Credit Suisse.

The firm announced Tuesday that it expects to take a CHF 4.4 billion (USD $4.7 billion) writedown following losses related to family office Archegos Capital Management’s failure to meet its margin requirements.

Executives are stepping down, and the firm has launched two investigations: one into Archegos, and another into Credit Suisse’s purchase of Greensill Capital’s supply chain debt. Thomas Gottstein, chief executive officer of the firm, called the losses tied to Archegos “unacceptable.” Continue reading “Article: After Taking $4.7 Billion Hit, Credit Suisse Executives Step Downs”

Article: Credit Suisse overhauls management as it takes $4.7 billion hit on Archegos

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Credit Suisse overhauls management as it takes $4.7 billion hit on Archegos

Brenna Hughes Neghaiwi, Matt Scuffham, 06 April 2021

ZURICH (Reuters) -Credit Suisse said on Tuesday it will take a 4.4 billion Swiss franc ($4.7 billion) hit from dealings with Archegos Capital Management, prompting it to overhaul the leadership of its investment bank and risk division.

The scandal-hit bank now expects to post a loss for the first quarter of around 900 million Swiss francs. It is also suspending its share buyback plans and cutting its dividend by two thirds. Continue reading “Article: Credit Suisse overhauls management as it takes $4.7 billion hit on Archegos”

Article: In Archegos fire sale, Credit Suisse, Nomura burned by slow exit

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In Archegos fire sale, Credit Suisse, Nomura burned by slow exit

Matt Scuffham, Elizabeth Dilts Marshall, Brenna Hughes Neghaiwi, 31 March 2021

NEW YORK/ZURICH (Reuters) -While banks including Goldman Sachs, Morgan Stanley and Deutsche Bank were able to exit their trades with Archegos Capital relatively unscathed, Credit Suisse and Nomura have been burned in the fire sale.

The blowup of the Archegos fund, a family office run by former Tiger Asia manager Bill Hwang, is still reverberating across the financial system, with global banks so far standing to lose more than $6 billion.

Switzerland’s Credit Suisse and Japan’s Nomura are expected to bear the brunt of that. Continue reading “Article: In Archegos fire sale, Credit Suisse, Nomura burned by slow exit”

Article:SEC Opens Probe Into Archegos Chaos, Deutsche Bank Confirms ‘Quick Sale’ To Avoid All Losses

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SEC Opens Probe Into Archegos Chaos, Deutsche Bank Confirms ‘Quick Sale’ To Avoid All Losses

TYLER DURDEN, 31 March 2021

As more details from the now infamous debacle surrounding Tiger cub Archegos, whose massive derivative-based exposures spilled out into the open and transformed into the biggest and most painful rolling margin call to hit Wall Street since Lehman, we now know that at least six Prime Brokers scrambled to unwind the biggest hedge fund blowup since LTCM without hammering the overall market.

To “make a living in this business… be first, be smarter, or cheat…”

We previously noted that Morgan Stanley and Goldman Sachs were the “first” to break ranks and rejected the efforts of Credit Suisse’s emissaries who tried to create consensus to unwind the positions without sparking a panic.

As we now also know, Nomura and Credit Suisse which dithered and were unsure what to do, seeing their stock crushed and their counterparty risk hedge premia explode higher.. Continue reading “Article:SEC Opens Probe Into Archegos Chaos, Deutsche Bank Confirms ‘Quick Sale’ To Avoid All Losses”

Article: Nomura CEO’s Honeymoon Ends With $2 Billion Archegos Debacle

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Nomura CEO’s Honeymoon Ends With $2 Billion Archegos Debacle

Takashi Nakamichi and Takako Taniguchi,  31 March 2021

Nomura Holdings Inc.’s chief executive officer was having a bumper inaugural year in charge — until a U.S. family office spoiled the party.

Just days before Kentaro Okuda’s first anniversary as head of Japan’s biggest brokerage, the company warned of a “significant” loss from an unnamed U.S. client. That’s tied to the massive unwinding of leveraged bets by Bill Hwang’s Archegos Capital Management, according to people familiar with the matter. Continue reading “Article: Nomura CEO’s Honeymoon Ends With $2 Billion Archegos Debacle”

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