In a fresh twist in the saga surrounding the collapse of Archegos Capital Management which caused Credit Suisse substantial losses, U.S. judicial authorities have opened an investigation.
The U.S. Department of Justice has opened an investigation into the collapse in March of Archegos Capital Management, «Bloomberg» reported on Thursday, citing people with knowledge of the matter.
Federal prosecutors in Manhattan had sent requests for information to at least some of the banks that dealt with Archegos, the news agency reported. It is unclear what potential violations or entities authorities were examining.
Wider Swiss Damage
The Archegos debacle cost Credit Suisse 4.4 billion Swiss francs ($4.9 billion) in losses. This and the collapse of supply chain lender Greensill forced the bank to raise 1.9 billion francs in extra capital five weeks ago. Risk chief Lara Warner and top investment banker Brian Chin both resigned.
Swiss peer UBS suffered much less damage from Archegos, though the family office-hedge fund did wipe $434 million off its first-quarter net profit. Financial regulators in the U.S., U.K., Japan, and Switzerland are also investigating Archegos’ collapse.
