Archegos risk chief resolves some U.S. SEC claims

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Scott Becker, who is cooperating with U.S. prosecutors in a related criminal case against Hwang, agreed not to commit further violations of securities laws.

A judge will decide later whether Becker should pay civil fines, disgorge illegal gains and be barred from senior management positions and directorships at public companies.

Hwang and former Archegos Chief Financial Officer Patrick Halligan pleaded not guilty last week to charges they misled banks in order to borrow money, which was then bet on stocks through securities known as total return swaps.

Archegos, once with $36 billion in assets, collapsed last year when it was caught short on its trades, sparking a fire sale in stocks that caused big losses for Credit Suisse (SIX:CSGN) Group AG, Nomura Holdings (NYSE:NMR) Inc and others.

Becker and former Archegos head trader William Tomita pleaded guilty and are cooperating with prosecutors in a related U.S. Department of Justice criminal case.

In entering his plea on April 21, Becker said he misled banks to induce them to extend Archegos’ trading capacity, to dissuade them from liquidating positions in Archegos’ account, and not to take other steps that might hurt Archegos’ portfolio.

“And when you did these things, did you know that what you were doing was wrong and illegal?” U.S. District Judge Laura Taylor Swain asked him.

“Yes,” Becker responded.

The case is SEC v. Hwang et al, U.S. District Court, Southern District of New York, No. 22-03402.