Archegos Capital Management

Archegos Capital Management was a family office founded by Bill Hwang. It managed Hwang's personal wealth, growing to manage approximately $36 billion. The firm employed highly leveraged trading strategies, primarily using derivatives like total return swaps to gain exposure to various stocks. In March 2021, Archegos collapsed when some of its heavily concentrated positions moved against it, triggering margin calls that the firm couldn't meet. This led to a forced liquidation of its holdings, causing significant losses for several major investment banks, including Credit Suisse, which was particularly hard hit. Archegos and Hwang are newsworthy because Hwang is seeking a presidential pardon for his conviction in a fraud case related to the firm's collapse. He was sentenced to 18 years in prison and is currently free on bail while appealing the verdict. The case remains relevant due to its implications for risk management practices at financial institutions and the potential for regulatory changes to address the use of leverage by family offices.