Reported by: Jonathan Stempel

Bill Hwang, whose Archegos Capital Management LP collapsed suddenly in March 2021, on Tuesday urged a federal judge to dismiss a U.S. Securities and Exchange Commission civil lawsuit accusing him and his once-$36 billion private investment firm of fraud.

In court filings, Hwang and Archegos said the SEC failed to show how the New York-based firm traded deceptively or how its swaps trades, which they called “lawful,” affected prices.

They said that undermined the regulator’s claim that Archegos boosted ninefold from $4 billion in just six months through a “brazen” market manipulation scheme.

“The SEC declares unlawful a number of practices that have long been accepted as entirely legitimate and commonplace in the market,” Hwang said.

“No trader could have known that these kinds of actions would someday be deemed unlawful, simply because Mr. Hwang’s trading backfired in the short term, costing him, but no other investors, billions of dollars in losses,” he added. In its own court filing, Archegos said Hwang’s trades were no different from transactions by “an enthusiastic investor with the means to pursue an investment opportunity.”

Read full report: https://www.reuters.com/markets/us/bill-hwangs-archegos-demands-end-sec-fraud-lawsuit-2022-10-25/