BusinessInsider/Isabella Lee/4-12-2021
“The Archegos sell-off exposed the fragility of the financial system, especially those involving lesser-known practices such as total return swaps, a derivative instrument that enabled Bill Hwang’s office not to have ownership of the underlying securities his firm was betting on and the secrecy of family offices. Typically, family offices enjoy the “private adviser exemption” provided under the Advisers Act to firms as these usually advise less than 15 clients, among other conditions.”
USAGOLD note: The big question hanging over Wall Street at the moment and the one to which there is no ready answer is: How much of this is out there? The sword of Damocles hanging over financial markets is the one quadrillion dollars in notional derivatives of which Archegos was only a small part.
