SEC Charges Hedge Fund with Massive Market Manipulation Scheme!

Archegos  Capital Management founder, Bill Hwang, and its former chief financial officer Patrick Halligan were arrested in connection with the situation of the firm which took place last year.

The men arrested are expected to appear in court later today (April 27, 2022)

They are apparently being charged with the following: Racketeering conspiracy, securities fraud and wire from said in a statement from the US district court.

If you are not already familiar with what Hwang allegedly did, inside of the indictment the prosecutors allege the owner of Archegos used his own money to manipulate markets and commit fraud in a scheme. During the time of running this scheme, Hwang’s wealth rose from around $1.5 Billion dollars to more than $35 Billion the documents said.

We have talked about earlier this year when Securities and Exchange commission Chairman Gary Gensler has proposed a few new changes to the SEC’s “Form Private Fund (PF)” rules that would boost the requirements for Private fund and hedge funds to disclose information. However, retail investors are starting to feel like Gensler’s moves are all for show and that these new rules mean nothing if the SEC fails to enforce them. 

inside of the Sec’s report it says, “We allege that Hwang and Archegos propped up a $36 billion house of cards by engaging in a constant cycle of manipulative trading, lying to banks to obtain additional capacity, and then using that capacity to engage in still more manipulative trading,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “But the house of cards could only be sustained if that cycle of deceptive trading, lies and buying power continued uninterrupted, and once Archegos’s buying power was exhausted and stock prices fell, the entire structure collapsed, allegedly leaving Archegos’s counterparties billions in trading losses.”

This one instance really puts things into perspective for all investors alike. The market manipulation that has been taking place for years have been enough to clearly move markets and allow certain hedge fund owners to become filthy rich. The SEC crackdown on Archegos could be just the start of the SEC dropping the hammer on those who allegedly commit crimes like these. This investigation is ongoing, and we are likely to hear a lot more over the next few days.

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