Three high US banks will hand over greater than $100 million to settle a lawsuit associated to the collapse of a multi-billion-dollar funding agency.
Morgan Stanley, Goldman Sachs and Wells Fargo have agreed to pay a mixed $120 million to settle a lawsuit alleging they hid conflicts of curiosity when promoting ViacomCBS shares, which contributed to the collapse of Invoice Hwang’s Archegos Capital Administration, experiences Reuters.
The case towards the three banks was filed final month by former shareholders of ViacomCBS, now generally known as Paramount World.
Archegos, a household workplace that after managed $36 billion, collapsed in March of 2021 when Hwang’s leveraged funding bets in ViacomCBS and different corporations fell by way of. Archegos had about $20 billion of ViacomCBS publicity.
The three banks helped Archegos place huge bets on ViacomCBS and different shares, whereas on the similar time, they acted as underwriters for ViacomCBS in a secondary providing.
Traders led by the Camelot Occasion Pushed Fund and the Municipal Police Staff’ Retirement System of Baton Rouge, Louisiana, accused the three banks of hiding their roles with Archegos and promoting off their shares to keep away from losses.
The settlement is pending approval by a decide in New York state courtroom.
Morgan Stanley, Goldman and Wells Fargo have denied wrongdoing in agreeing to settle the lawsuit.
Hwang and former Archegos chief monetary officer Patrick Halligan have been convicted of fraud in 2024 over the agency’s collapse. Hwang was sentenced to 18 years in jail and Halligan was sentenced to eight years in jail. Each are interesting whereas out on bail.
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