Securities regulators in the US and Europe are scrutinising discussions between six banks linked to Archegos Capital Management to decide whether any acted inappropriately during a recent fire sale of shares that topped $20bn.
Archegos founder Bill Hwang on Thursday gathered Wall Street lenders Goldman Sachs, Morgan Stanley and Wells Fargo, as well as Swiss rivals UBS and Credit Suisse and Japan’s Nomura, in a last-ditch effort to unwind billions of dollars of markets bets in an orderly manner.
But on Friday banks started selling large blocks of shares that had underpinned Hwang’s trades, knocking $33bn of value off media groups ViacomCBS and Discovery and Chinese tech stocks, such as Baidu. The sales spurred losses for Nomura and Credit Suisse that are expected to run into billions of dollars.