Archegos' Bill Hwang asks for Morgan Stanley probe after costly short squeeze - Bloomberg News

[May 18, 2022]  (Reuters) - Archegos Capital Management founder Bill Hwang has asked for a probe into Morgan Stanley to review if someone at the bank tipped off outsiders of the firm's plan to buy Futu Holdings Ltd stock in bulk, according to a Bloomberg News report on Tuesday.

Sung Kook (Bill) Hwang, the founder and head of a private investment firm known as Archegos exits the Manhattan federal courthouse in New York City, U.S., April 27, 2022. REUTERS/Shannon

Archegos had alerted U.S. authorities of a short squeeze on Futu, which took almost $4 billion out of Hwang's portfolio, after regulators launched a probe into block-trading at Morgan Stanley earlier this year, Bloomberg reported, citing one person familiar with the matter.

Spokespeople for Hwang and Morgan Stanley did not immediately respond to Reuters' requests for comment.

The U.S. Securities and Exchange Commission said in February they were probing the investment banking giant on whether financial executives may have broken rules by tipping off hedge funds ahead of large sales of shares, known as "block trades".

Archegos collapsed in March last year after its highly leveraged stock bets went sour. The family office run by Hwang defaulted on margin calls, triggering losses of up to $10 billion that sent shockwaves through Wall Street and led to calls for more stringent regulation of family offices.

(Reporting by Sohini Podder and Niket Nishant in Bengaluru; Editing by Maju Samuel)

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