A federal judge yesterday rejected Bill Hwang's bid to dismiss a U.S. Securities and Exchange Commission lawsuit accusing him of fraud that led to the March 2021 collapse of his $36 billion firm Archegos Capital Management, Reuters reported. U.S. District Judge Paul Oetken in Manhattan said the SEC plausibly alleged that Hwang and Archegos, which is also a defendant, intentionally concealed the risks they were taking in their bid to manipulate markets through swaps transactions and to artificially inflate the value of their largest stock holdings. Oetken dismissed some fraud-based claims against former Archegos Chief Financial Officer Patrick Halligan, while letting the SEC pursue claims that Halligan aided and abetted fraud by former Archegos risk management chief Scott Becker. The judge also granted a request by the U.S. Department of Justice to put the SEC civil case on hold while it pursues related criminal charges against Hwang and Halligan. Oetken in a separate decision dismissed a U.S. Commodity Futures Trading Commission civil lawsuit against Archegos and Halligan, saying the regulator lacked power to sue over the swaps. Becker and William Tomita, who was Archegos' head trader, have pleaded guilty in the criminal case. Hwang's and Halligan's trial is scheduled to start on Feb. 20, 2024.
