Credit Suisse was thrown into turmoil when Archegos collapsed in March last year. Now the bank is in out-of-court negotiations with the defunct investment firm.
Credit Suisse, Morgan Stanley and other banks in negotiations with Archegos Capital Management as they attempt to steer clear of having to reveal details related to the implosion of the family office in court, «Financial Times» (behind paywall) reports, citing three people familiar with the matter.
Efforts to reach an out-of-court settlement come as the U.S. Department of Justice examines whether banks broke rules when they agreed to privately sell large quantities of shares to hedge fund clients as they did during the fallout of Archegos last year.
Credit Suisse, Nomura, Morgan Stanley, UBS, MUFG and Mizuho all provided services via their prime brokerage divisions to Archegos. Together they lost around $10 billion when they liquidated the family office’s positions in US-listed companies, such as ViacomCBS, after Archegos' was unable to meet margin calls.
Banks have threatened legal action against the family office-hedge fund to recoup some of the money they lost last March. Archegos said that it would reject their claims, which could result in a lengthy public legal process, the report says citing one person familiar with the matter.
