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Bloomberg
Credit Suisse Group AG, saddled with billions of dollars in losses from the collapse of Archegos Capital Management last year, is trying to help the US Justice Department potentially build a case related to block trading against rivals Morgan Stanley and Goldman Sachs Group Inc.
The Swiss firm’s push to provide assistance apparently goes beyond banks’ routine cooperation with requests for information, according to people familiar with the matter, who asked not to be identified discussing confidential deliberations. Last week, Credit Suisse’s representatives delivered a presentation to the US Attorney’s Office for the Southern District of New York, flagging potential issues with Archegos’s collapse in March.
No bank was hurt more by the blowup of Bill Hwang’s highly leveraged family office than Credit Suisse, which was left nursing more than $5 billion in losses, a hit that triggered leadership and structural changes. Persuading authorities that other banks acted improperly could help the Zurich-based lender head off regulatory sanctions or even give it a legal edge in recouping some losses.
Representatives for Credit Suisse, Morgan Stanley, Goldman Sachs and the Justice Department declined to comment.
Archegos used banks’ prime brokerages to place outsized bets on stocks that soon soared, giving it gains that allowed it to wager more. When prices started slipping, the firm came under pressure.
And when lenders realized it couldn’t post the collateral needed to avoid unwinding the positions, they held emergency talks.
Bloomberg reported last year that Credit Suisse, facing significant exposure, pushed for an agreement to hold off on rapidly unwinding the family office’s portfolio. But the effort failed, and Credit Suisse was caught flat-footed as Morgan Stanley and Goldman Sachs moved faster to extinguish their exposures, setting off further price declines that spelled pain for banks left behind.
According to two of the people, Credit Suisse has sought to spotlight transactions involving ViacomCBS Inc., a major Archegos holding. The company —now known as Paramount Global —planned a secondary stock offering, tapping Morgan Stanley to lead the deal.