Once Upon a Farm Raises Nearly $198 Million in IPO, Valued at Over $724 Million 
Missouri Judge Dismisses Lawsuit Challenging Starbucks’ Diversity and Inclusion Policies 
Amazon Stock Rebounds After Earnings as $200B Capex Plan Sparks AI Spending Debate 
Prudential Financial Reports Higher Q4 Profit on Strong Underwriting and Investment Gains 
Uber Ordered to Pay $8.5 Million in Bellwether Sexual Assault Lawsuit 
U.S. Lawmakers to Review Unredacted Jeffrey Epstein DOJ Files Starting Monday 
Nasdaq Proposes Fast-Track Rule to Accelerate Index Inclusion for Major New Listings 
Trump Family Files $10 Billion Lawsuit Over IRS Tax Disclosure 
Trump Administration Sued Over Suspension of Critical Hudson River Tunnel Funding 
Supreme Court Signals Doubts Over Trump’s Bid to Fire Fed Governor Lisa Cook 
FDA Targets Hims & Hers Over $49 Weight-Loss Pill, Raising Legal and Safety Concerns 
Tencent Shares Slide After WeChat Restricts YuanBao AI Promotional Links 
Panama Supreme Court Voids CK Hutchison Port Concessions, Raising Geopolitical and Trade Concerns 
Instagram Outage Disrupts Thousands of U.S. Users 
Weight-Loss Drug Ads Take Over the Super Bowl as Pharma Embraces Direct-to-Consumer Marketing 
TSMC Eyes 3nm Chip Production in Japan with $17 Billion Kumamoto Investment 
Washington Post Publisher Will Lewis Steps Down After Layoffs 
A US judge on Thursday ended investor litigation against two banking giants, Goldman Sachs Group Inc and Morgan Stanley. The lawsuits accused them of market manipulation and insider trading, which allegedly contributed to the swift downfall of Bill Hwang's Archegos Capital Management in March 2021.
Unprecedented Financial Meltdown
Reuters noted that Archegos Capital, once valued at a colossal $36 billion, was mired down by Hwang's massive leverage through financial instruments like total return swaps. These contracts allowed him to amass an enormous position in various stocks, notably ViacomCBS, Discovery, and Baidu. This strategy inflated the firm's exposure to an estimated $160 billion worth of stocks.
According to US News, investors claimed that insider information gave Goldman Sachs and Morgan Stanley an unfair advantage, allowing them to sell their stocks and avoid the extreme losses that Archegos suffered due to failing to meet margin calls. The legal battle was to hold the banks accountable for the damages sustained by investors who were caught in the wildfires of this financial collapse.
The Judicial Verdict
US District Judge Jed Rakoff's decision to dismiss the claims with prejudice stops further pursuing these allegations in court. The justification for his ruling will be disclosed in a subsequent opinion.
Responses to these developments have been tepid, with lawyers for the investors unavailable for comment and Morgan Stanley opting for silence. Goldman Sachs has also withheld immediate reaction.
Broader Impact on the Banking Sector
This event sent shockwaves through the industry, causing significant losses for other banking institutions like Credit Suisse, which later merged with its Swiss counterpart UBS and Japan's Nomura Holdings.
What Lies Ahead for Archegos Executives
Looking ahead, Hwang and Archegos' former CFO Patrick Halligan face a criminal trial set for May 8 in Manhattan. They have both entered pleas of not guilty to various charges, including securities fraud, and a lengthy trial process is anticipated.
Photo: Goldman Sachs Newsroom
