Daniel popowski
08/12/2021 12:04
Clarín.com
International
Updated 08/12/2021 12:04
The man is sitting in a chair outside his home in suburban Tenafly, New Jersey, USA.
Watch the people go by, take a sip from their glass.
But it is not just another neighbor who rests after his workday but
Bill Hwang
,
the investor who lost 20,000 million dollars
on Wall Street in just two days.
It is more than difficult to associate this man of Korean origin with a millionaire who only thinks about how to spend his fortune on luxuries, such as high-end cars or a private jet, a penthouse or travel around the world.
"I live a little below what my finances allow," he confessed in a video recorded at the Metro Community Church of New Jersey a couple of years ago In fact, a video recorded at the Metro Community Church of New Jersey a couple of years ago. years who worked
under the well-known hedge fund manager Julian Robertson
.
The rise of Bill Hwang
Back in 2001, Hwang created the
Tiger Asia Management
fund
, which became one of Wall Street's largest stock investors in Asian stocks.
That was until the US Securities and Exchange Commission (SEC) began a rigorous investigation against him.
Bill Hwang, the investor who lost $ 20 billion.
As early as 2012, Hwang was
accused by the SEC of insider trading
in connection with his dealings with Chinese bank stocks and was forced to
pay $ 44 million
to settle a civil lawsuit.
Again the problems appeared on the horizon of this risky investor, who did not go around the time to start businesses and establish contacts.
It was the turn in 2013 of the creation of
Archegos Capital Management
, a family investment fund, a form of organization less regulated than conventional hedge funds.
By 2020, the entity's equity exceeded $ 10 billion, while
Hwang
himself
amassed a fortune of $ 20 billion
.
Stock brokers work on the New York Stock Exchange, United States.
Photo: Bloomberg
As is often the case with mega-figures that move in the hostile terrain of stock investments, there are usually great victors.
But also, of those that end up with deep and painful wounds.
The fall and its consequences
Archegos had large bets leveraged in US media stocks such as
ViacomCBS and Discovery
, as well as in some Chinese companies, including Baidu, Tencent Music and Vipshop, reflect the specialized media.
After the
values of these companies fell on March 26, 2021
, the fund began to incur losses and the entity's cash was no longer sufficient to cover them.
On March 29, 2021, following the margin loan procedure, the brokers demanded to add guarantees.
But when this did not happen, there were forced sales of the shares by the brokers,
which led to a tremendous and accelerated drop in prices
, as each broker was urged to cut their losses.
A phenomenal run.
The neighborhood surrounding Bill Hwang's home in Tenafly New Jersey.
The total value of those forced liquidations was estimated to have reached $ 30 billion.
And as a consequence of the turning point, the US financial authorities began an investigation to
clarify the causes of the collapse
.
Among the Archegos lenders were the
US banks Goldman Sachs and Morgan Stanley, the largest Japanese investment bank, Nomura, or the Swiss Credit Suisse
.
And according to
The Financial Times
, they initially tried to agree on how to
dispose of the shares in an orderly manner and thus limit the negative consequences for the market
.
However, his efforts were unsuccessful.
As a result, banks began to compete with each other over who would liquidate those assets first, eventually crashing the market.
A resounding fall that will not be erased from the memory of many actors.
Bill Hwang, the Korean-born investor who experienced a financial meltdown last March.
For those who could not move fast enough, the blow was very painful: the losses of the Japanese lender could reach 2,000 million dollars, while in the Swiss entity they rose to between 3,000 million and 4,000 million dollars, reflects
RT
.
What came after the collapse
Credit Suisse showed on July 29 the first official look at the incident by publishing an analysis of its administrative failures that contributed to the failure, they expand.
"It seems likely that Archegos misled Credit Suisse and mistook the true scope of its positions, which Archegos accumulated in the midst of a pandemic," the entity's report said.
The Hwang Family Investment Office is awaiting its corresponding liquidation.
Just a few months ago, the billionaire owned properties, built with borrowed money,
valued at more than $ 120 billion
.
888 7th Avenue, building that housed the offices of Archegos Capital Management.
But of course, in such a scenario, the Archegos Capital Management lenders who lost their money
are lining up to receive compensation
.
The person handling the liquidation is
David Pauker
, a specialist who intervened after the
Lehman Brothers implosion in the 2008 financial crisis
,
The Financial Times reports.
Archegos offices were mostly emptied.
But Hwang's charity,
Grace and Mercy Foundation
, continues to operate, even though it had to move to a cheaper office in New York.
The foundation accumulated more than 600 million dollars for 2019, details
CNBC
with reference to financial documents.
New life style
After the economic collapse, the billionaire had to change his lifestyle and give up extravagant luxuries.
Tenafly Classic Diner, the modest restaurant where Bill Hwang attends.
Waiters at Tenafly Classic Diner, a
modest restaurant
in the town of Tenafly, in the state of New Jersey, recognize him as one of their regular diners, Bloomberg reports.
The media also says that Hwang himself
continues to make investments with the money he has left
and seeks to solve his problems with lenders and authorities.
On the other hand, he found a refuge in his spare time: he spends his time
praying, reading Christian-themed books and listening to Bible recordings
.
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