Bill Hwang, founder of Archegos, right, with his attorney Lawrence Lustberg.
© 2012 Bloomberg Finance LP
Archegos is the first big scandal to hit the family office sector, a newish industry built to serve the needs of billionaires. The impact will be huge, say insiders, as banks and regulators turn against family offices, and family offices turn in on themselves.
New York-based Archegos cost six banks (Credit Suisse
CS
MS
The firm was created by Bill Hwang as a family office, essentially a private company to manage his wealth. But despite his own millions, Hwang borrowed heavily from banks to build up large stakes in public companies such as Viacom, Farfetch and Vipshop.
But when their share prices fell, banks called in their loans and Archegos defaulted, starting a domino effect that has cost nearly $20…
