The founder of collapsed Archegos Captial, Bill Hwang, was arrested in New York on Wednesday on charges of federal racketeering, fraud, and market manipulation, the «Financial Times» (behind paywall), reported Thursday.

The indictment filed by the U.S. Department of Justice (DoJ) detailed alleged deceptions and complaints that were issued by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).

In its complaint, the SEC said «These deceptions induced Archegos's counterparties to continue to transact with it and extend leverage beyond what the counterparties' risk tolerance would have otherwise permitted had they known the truth».

Hwang has pleaded not guilty to the charges, and his attorney said the indictment «has absolutely no factual or legal basis».

Massive Losses for Banks

Credit Suisse, Nomura, Morgan Stanley, UBS, MUFG, and Mizuho all provided services via their prime brokerage divisions to Archegos. Together they lost around $10 billion when they liquidated the family office’s positions in US-listed companies, such as ViacomCBS after Archegos' was unable to meet margin calls, as finews.com reported. 

Swiss Banks

UBS suffered losses of $861 million when Archegos Capital Management collapsed in 2021, which impacted traders' bonuses, as finews.com reported. 

For Credit Suisse, the tab was much higher with the troubled Swiss bank losing aroun d $5.5 billion related to the Archegos implosion.