The Disaster at a Glance
- $36 billion fortune evaporated in a single weekend
- Used Total Return Swaps to hide positions from regulators
- Controlled ~10% of some companies without anyone knowing
- Prime brokers lost $10+ billion combined
- Credit Suisse alone lost $5.5 billion
- Bill Hwang now faces federal criminal charges
The Man Who Lost More Money Than Anyone in History
Before we dive into the wreckage, you need to understand Bill Hwang.
Sung Kook "Bill" Hwang
Bill Hwang was a protégé of Julian Robertson, the legendary founder of Tiger Management. The "Tiger Cubs" who trained under Robertson became some of the most successful hedge fund managers in history. Hwang was one of them — until he wasn't.
In 2012, Hwang's hedge fund Tiger Asia pleaded guilty to wire fraud charges for insider trading. He paid $44 million in penalties and was banned from managing outside money.
For most people, that would be the end. For Bill Hwang, it was just the beginning.
"The SEC told him he couldn't manage other people's money anymore. So he just managed his own — and turned $200 million into $36 billion."
— Wall Street's Darkest Irony
In 2013, Hwang converted Tiger Asia into a "family office" called Archegos Capital Management. This distinction was crucial — family offices that manage only the family's wealth face almost zero regulatory oversight.
No SEC filings. No 13F disclosures. No position limits. No one watching.
The Secret Weapon: Total Return Swaps
Here's where it gets devious.
If Hwang had simply bought stocks, he would have had to file regulatory disclosures when positions exceeded 5% of a company. Everyone would know what he owned.
Instead, he used a financial instrument called Total Return Swaps. And this changed everything.
Here's how it worked:
Complete Invisibility
The BANK owns the shares on paper. Archegos just gets the economic exposure. No filing requirements.
Insane Leverage
With only 10-15% margin, Archegos could control $10 worth of stock with every $1 of capital. 8-10x leverage.
Multiple Banks
Archegos used 6+ prime brokers. None knew the others existed. Each thought they had the full picture.
No 13F Filings
Family offices with under $100M in certain securities don't file. Swaps don't count.
No 13D/13G Filings
Swaps aren't "beneficial ownership" under old rules. Could own 10%+ invisibly.
Fragmented Counterparties
Goldman, Morgan Stanley, Credit Suisse, Nomura, UBS, Deutsche Bank — each saw only their slice.
Family Office Status
Exempt from Investment Advisers Act. Minimal oversight. Maximum freedom.
"Hwang found a legal way to become one of the largest shareholders in multiple companies without anyone — the SEC, the companies, or even his banks — having any idea."
— The Ultimate Stealth Trade
The Portfolio: Betting Everything on a Handful of Stocks
Most hedge funds diversify across dozens or hundreds of positions. Hwang did the opposite. He loaded up on just a handful of stocks with massive concentration.
His core holdings were:
ViacomCBS
Media ConglomerateDiscovery
Media CompanyBaidu
Chinese Tech GiantTencent Music
Chinese StreamingGSX Techedu
Chinese Education (Controversial)Notice something? Heavy exposure to Chinese stocks and media companies. All sectors that could move violently on news. All highly correlated. Zero diversification.
Hwang's buying was so aggressive that he was actually moving the market. His own purchases drove prices higher, making his positions look even more profitable. A beautiful, dangerous feedback loop.
The Trigger: When ViacomCBS Got Greedy
By March 2021, everything looked perfect. ViacomCBS had tripled in value over a few months — largely thanks to Hwang's own buying. The stock hit $100.
Then ViacomCBS announced something that sealed Archegos's fate: a $3 billion stock offering.
The stock offering meant dilution. Investors hate dilution. ViacomCBS dropped 9% on the announcement. Then 23% the next day.
For a normal investor, this would hurt. For Hwang, leveraged 8-to-1 with concentrated positions? It was nuclear.
"When you're leveraged 8:1 and your biggest position drops 30%, you don't just lose money. You lose EVERYTHING. Then you owe more."
— The Math of Destruction
The Margin Calls: 48 Hours of Chaos
Thursday, March 25, 2021. The margin calls started coming.
As ViacomCBS and Discovery crashed, Archegos's brokers demanded more collateral. The banks finally realized they had a serious problem.
What happened next was a prisoner's dilemma played out in real-time:
Friday Night Meeting
Goldman Sachs organized a call with all major banks. Proposal: coordinate an orderly unwind to minimize damage for everyone.
Trust Collapsed
No formal agreement was reached. Each bank knew the first to sell would suffer the least. The game theory was brutal.
Race to Exit
Goldman and Morgan Stanley didn't wait. They started liquidating positions immediately, triggering a cascade.
The Fire Sale: When Everyone Runs for the Exit
On Friday, March 26th, Goldman Sachs sold $6.6 billion in block trades before the market opened. Morgan Stanley followed with billions more. The news hit the wire.
ViacomCBS. Discovery. Baidu. Tencent Music. All crashed simultaneously as the forced selling overwhelmed the market. The stocks Hwang had spent years accumulating were dumped in hours.
This is what a forced liquidation looks like:
But here's where it gets interesting. Not all banks acted the same way.
Credit Suisse didn't sell over the weekend. They thought maybe prices would recover. They thought wrong. By the time they acted, prices had cratered even further.
"In a liquidation, the first seller wins. The last seller loses. Credit Suisse was the last seller."
— Lesson in Game Theory
The Body Count: Who Lost What
When the dust settled, the losses were staggering:
Total bank losses: $10+ billion.
Credit Suisse's losses were so severe that it accelerated the bank's eventual collapse in 2023, when it was absorbed by UBS in an emergency rescue.
That's $12.5 million vanishing every single minute.
The Aftermath: Fraud Charges & Criminal Trial
In April 2022, Bill Hwang and his CFO Patrick Halligan were arrested and charged with racketeering, fraud, and market manipulation.
Prosecutors alleged that Archegos:
Manipulated Stock Prices
Used coordinated buying across banks to artificially inflate prices, creating a false appearance of organic demand.
Deceived Banks
Lied to prime brokers about total positions and exposure. Each bank thought they had the complete picture.
Securities Fraud
Concealed material information from counterparties about the true nature and size of Archegos's positions.
Racketeering
Operated Archegos as a criminal enterprise. RICO charges — the same used against organized crime.
In July 2024, Bill Hwang was found guilty on 10 of 11 counts. He faces up to decades in prison.
"Bill Hwang's greed and deception knew no bounds. He built a house of cards on a foundation of lies, and when it collapsed, it took billions of dollars with it."
— U.S. Attorney Damian Williams
The Brutal Lessons
Archegos's collapse is a masterclass in everything that can go wrong in modern finance:
Leverage is a Loaded Gun
8-to-1 leverage means an 12.5% drop wipes you out. Hwang's positions dropped 30%+. The math is unforgiving.
Concentration Kills
When your top 5 positions ARE your portfolio, any single thesis failure destroys everything.
Regulators Are Always Behind
Total return swaps, family office exemptions — the system had massive blind spots that Hwang exploited.
Banks Fail at Risk Management
Six major banks gave leverage to the same client without knowing about each other. Basic counterparty risk 101.
In a Crisis, Trust Evaporates
Goldman's "coordination call" lasted until Goldman realized they should sell first. Every man for himself.
Past Fraud is a Warning Sign
Hwang was convicted of insider trading in 2012. Nine years later, he blew up even more spectacularly. Patterns repeat.
The Final Score
Let's tally up the carnage:
"The market can stay irrational longer than you can stay solvent. And when you're 8x leveraged in concentrated positions, you can become insolvent in a single day."
— The Archegos Lesson
Archegos is a warning about what happens when leverage, concentration, and opacity combine. Hwang wasn't stupid — he turned $200 million into $36 billion. But he confused making money with managing risk. In the end, the market doesn't care how smart you are or how much you've made. It only asks: can you survive the bad days? Hwang couldn't.