Credit Suisse Urged Archegos to Be ‘More Aggressive’

Reported by Anthony Lin, Senior Legal Editor

Here are the key takeaways from the day’s testimony:

Former Archegos head trader William Tomita said Hwang lied to Archegos’ biggest counterparties on a March 25, 2021, call. Hwang told the banks that his family office’s core positions were fairly liquid, with average daily volumes in the $2 billion to $3 billion range. Tomita said most of the firm’s top holdings traded at volumes far below that. “These numbers were not at all realistic,” he told the jury.

Hwang’s chief lawyer, Barry Berke, began his cross-examination of Tomita by asking if he believed in Hwang’s investment strategy in 2020 and 2021. Tomita equivocated, saying he sometimes did, sometimes didn’t. “I remember wanting to believe he was right,” he said. Berke was aiming to normalize conduct that the prosecution – and Tomita – have painted as market manipulation. He asked Tomita why he didn’t prevent his team from carrying out allegedly improper trades. “That’s because you didn’t think it was improper at the time, did you, Mr. Tomita?” Berke pressed.
Berke pointed out times when the banks encouraged Archegos to take more risk. He showed Tomita and the jury an email from a Credit Suisse trader about the Japanese market saying Archegos’ orders “tend to have high alpha and move away potential.” Tomita explained this was Credit Suisse telling them to take a more aggressive position. “This is CS coming to you for these orders and saying you should be more aggressive in filling your orders,” Berke remarked. The defense lawyer also highlighted a separate suggestion by a Goldman trader that Archegos tweak its algorithm to be more aggressive.

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