Phil Hwang, founder of Archicos Capital Management, the family office that collapsed, was arrested by U.S. authorities and charged with fraud, fraud and market manipulation.

The indictment, released Wednesday, alleges that Hwang, 58, and Patrick Halligan, 45, a former chief financial officer, used Archie as a “tool for market manipulation and fraud” and “had far-reaching consequences for other participants in the US stock market.” “

The lawsuit, filed by federal prosecutors in Manhattan, marks the first criminal case against Hwang, one of Julian Robertson’s Tiger Management Fund’s Tiger Cup players. A year ago.

Damien Williams, a U.S. attorney in the Southern District of New York, said: “The volume of trade is enormous.

Although Archicos is a relatively obscure family office, it has been able to attract many large lenders. Archicos’ capital rose from $ 1.5 billion in March 2020 to $ 35 billion a year later, bringing the group’s position to $ 160 billion.

There was a collapse of the Archicos Billion dollars Losses following the failure of margin calls to investment banks, including Credit Suisse, UBS, Nomura and Morgan Stanley, have wiped out nearly $ 100 billion in the estimates of nearly a dozen companies as Archegos’ positions were not affected.

The group uses billions borrowed from banks such as Morgan Stanley and Credit Suisse to raise billions of dollars for positions in US companies such as ViacomCBS – now known as Paramount – and online retailers such as Shopify and Farfetch. By using derivatives, the bank trades shares bought or sold on behalf of Archicos, leaving no trace of their operation to the public in which the company invests.

“The project had a historic purpose,” Williams said. “Lies fed him” [stock price] Inflation and inflation feed more lies. Went round and round. But last year the music stopped, the bubble burst, prices plummeted and billions of dollars evaporated overnight.

Hwang and Holigan pleaded not guilty in Manhattan federal court.

Wearing a green turtleneck sweater, Hwang agreed to sign a $ 100 million bond that would protect $ 5 million in money and interest on two properties, including his house.

The former hedge fund manager agreed to limit his travel restrictions to parts of New Jersey, Connecticut and parts of New York. A lawyer told the court he had lost his passport and had promised not to apply for a new passport.

On Wednesday, Hwang’s lawyer said the investor had “done nothing wrong” and that the allegations were “excessive.”

Lawrence Lustberg, Hwang’s adviser, said: “We are deeply disappointed that the U.S. Attorney’s Office considers it appropriate to investigate a case that is completely untrue or legally binding;

Holigan’s lawyer said he was innocent and would be “released.”

Scott Becker, director of risk management at Arkigos, and William Domita, the family’s leading businessman, have been charged with conspiracy theories. They have pleaded guilty and are working with the US government, the judiciary said.

The Securities and Exchange Commission filed a joint civil lawsuit against Archigos and Hwang on Wednesday morning. It said that as of March 2021, the derivatives of Archicos and the shares of ViacomCBS are more than half of the company’s freely traded shares.

When asked by a colleague if the relative decline in ViacomCBS shares was a “sign of strength” on a day when the SEC experienced a broad-based stock market crash in June 2020, Hwang said, “No. This is a sign that I’m buying. He added emojis for fun or laughter.”

The Commodity Futures Trading Commission also filed civil charges against Arcos and Holigan.

Prosecutors allege that Hwang and Holigan conspired to commit two related crimes. They accused Arkigos of covering up its trading and position, so its shareholders and other traders in the market said, “The prices of those shares are the result of natural supply and demand, in fact they are an artificial product of Hwang’s maneuvering.”

It also alleges that Archigos misrepresented the group’s investment plans and shares as it received billions of dollars from major Wall Street lenders as a stumbling block to its company.

Although the banks were aware that Archigos was betting on a relatively small number of transactions, they were misinformed about the size of those transactions, and prosecutors said the family office had promised that Archigos could withdraw from its operations within two weeks.

But that is not the case. Last year, the group’s share in ViacomCBS was over $ 20 billion and more than 10 percent of its trading shares in the media company. Proponents of her case have been working to make the actual transcript of this statement available online.

According to lawyers, Hwang sometimes coordinated things with a former unnamed colleague who runs the hedge fund. When Archigos wanted to increase its position on GSX Techdu in 2021, one of its major brokers hit its limits by refusing to buy a large stake in a Chinese educational institution listed in the United States. That limit limits GSX’s ability to enter into new swap agreements with its customers.

Hwang knew that a former colleague described as a “close friend” had held a similar position at GSX Techdu at the same bank. Prosecutors allege he “caused” the person to transfer to another bank, which allowed Archigos to increase its position on the GSX.

There is a fall of Archocos Led to the creation of new rules Regulators at the SEC are pushing for a reshuffle for large investors.

Additional Report by Mark Vondevelde in New York