Compliance lessons, regulatory fallout from Archegos meltdown

Following the recent meltdown of family office Archegos Capital Management there are plenty of unanswered questions. As a so-called “family office,” Archegos is exempt from reporting requirements from both the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC). This exemption was carved out with the idea that wealthy families, managing their own money, would not present a risk to retail investors. But billionaires like Bill Hwang who managed Archegos have used this exemption to inject huge amounts of money — and risk — into the markets without regulators knowing anything about it. Aaron Nicodemus considers that there are probably plenty of compliance lessons to be learned as he describes in a newly published article in Compliance Week.

 

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