Archegos Co-CEO Drops Bid for Hwang Money After US Opposition

In a surprising turn of events, the co-CEO of a major investment bank has decided to drop the bid for money from Bill Hwang, the founder of the now-disgraced Archegos Capital Management. The decision comes after the U.S. government's opposition to the merger between Credit Suisse and UBS, which raised concerns about the regulatory environment and potential increased scrutiny.

The co-CEO, who wished to remain anonymous, cited several factors that led to the decision. "The market conditions are volatile and uncertain, making it difficult to predict the future performance of Hwang's investments," the co-CEO said. "Additionally, there are regulatory concerns associated with Hwang's investment strategy, which involves high leverage and complex derivatives. We are also worried about the potential damage to our reputation if we were to be associated with Hwang's controversial investment style and the potential losses that could result from his strategies."

The co-CEO also mentioned the lack of transparency in Hwang's investment portfolio and risk management practices, as well as potential conflicts of interest that could arise from managing Hwang's money. These factors led the co-CEO to conclude that the risks associated with accepting Hwang's money outweighed the potential benefits, and he decided to drop the bid.

The U.S. government's opposition to the merger between Credit Suisse and UBS also played a significant role in the co-CEO's decision-making process. The government's concerns about the potential risks and negative consequences of the merger, such as increased market dominance and potential job losses, led the co-CEOs to reconsider the merger and ultimately decide against it. The government's opposition also raised concerns about the regulatory environment and the potential for increased scrutiny, which may have contributed to the co-CEO's decision to abandon the merger.

The collapse of Archegos Capital Management in March 2021 resulted in billions of dollars in losses to counterparties that had financed Hwang's trading, including banks and prime brokers. The U.S. government's investigation into the collapse led to the indictment of Hwang and his co-conspirators on charges of racketeering conspiracy, securities fraud, wire fraud, and market manipulation. Hwang was later convicted and sentenced to 18 years in prison.

The co-CEO's decision to drop the bid for Hwang's money highlights the ongoing concerns and risks associated with investing in high-leverage, high-risk strategies, as well as the importance of regulatory oversight and transparency in the financial industry. As the Archegos saga continues to unfold, investors and financial institutions alike must remain vigilant and cautious when considering investments from high-profile, controversial figures like Hwang.