The spectacular implosion of hedge fund Archegos Capital Management, much like the GameStop saga earlier this year, serves as a reminder of the dangers posed by extreme leverage, secret derivatives and rock-bottom interest rates. and other media titans' stocks crashed Friday as Wall Street banks that lent to Archegos forced the firm to unwind its bets. Credit Suisse said that the default by a "significant US-based hedge fund" would cause a major hit to its earnings. Founder of hedge fund involved in insider trading scandalThe episode demonstrates the intricate web linking firms across Wall Street — and the risks to the banks providing large amounts of leverage. Bill Hwang, the firm's founder and a protégé of hedge fund pioneer Julian Robertson , was previously enmeshed in an insider trading scandal at Tiger Asia Management, a hedge fund he founded.

Source: CNN March 29, 2021 18:22 UTC