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The Big Take

Bill Hwang Made a Huge, Secret Bank Bet Before Archegos Collapse

His wager on a bank’s shares sent the price rocketing before the lender raised capital. Then Archegos imploded, taking the stock down too.

Bill Hwang, the man behind Archegos, used derivatives to secretly build a more-than 20% stake in a U.S. regional bank, under the noses of federal financial watchdogs.

Bill Hwang, the man behind Archegos, used derivatives to secretly build a more-than 20% stake in a U.S. regional bank, under the noses of federal financial watchdogs.

Photo Illustration: 731; Emile Wamsteker/Bloomberg

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(This story was originally published on November 17, 2021. Today, Archegos founder Bill Hwang and CFO Patrick Halligan were arrested and charged with 11 criminal counts, including racketeering conspiracy and securities fraud. Federal prosecutors said Hwang used Archegos as an “instrument of market manipulation and fraud,” inflating its portfolio from $1.5 billion to $35 billion before its spectacular collapse, causing massive losses for banks and investors.)

It’s a move that’s almost unthinkable even for Wall Street’s most maverick investors, for fear of landing in regulatory crosshairs.