(Bloomberg) -- Archegos Capital Management’s former co-chief executive officer abandoned efforts to recoup losses from the firm’s collapse after prosecutors said he was a “knowing participant” in founder Bill Hwang’s fraud rather than a victim.
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Andy Mills was among at least 20 former employees who sought $32 million as victims of Hwang, who was convicted last year and sentenced to 18 years in prison. But the government opposed claims for deferred compensation from Mills and two others, trader Daiki Taniguchi and analyst David Park. None of the three was charged with a crime or sued by regulators over their work at Archegos.
“In the days leading up to Archegos’s collapse, Mills joined numerous other employees in misleading Archegos’s counterparties about its financial condition,” prosecutors said in a Jan. 21 court filing.
Mills’ lawyer, Paul Fishman, on Monday called the government’s characterization of his client “inflammatory and misleading.” But Fishman said Mills was withdrawing his claim “in light of the limited funds available for other ACM employees seeking restitution.”
Hwang is facing a $9.4 billion restitution order stemming from losses that major banks like Credit Suisse, Morgan Stanley and Nomura Holdings suffered when his $36 billion family office collapse in March 2021. But US District Court Judge Alvin Hellerstein has said former Archegos employees will have priority in claiming Hwang’s remaining assets, which Hwang’s estimated to be worth around $55 million.
Credit Suisse’s $5 billion in losses from Archegos was a major factor in the bank’s own 2023 collapse.
Taniguchi also withdrew his restitution request. He was one of the traders who worked under Hwang and head trader William Tomita. A star prosecution witness, Tomita described on the stand how Taniguchi acted on Hwang’s close instructions to manipulate shares, according to the government.
Mark Berman, a lawyer for Taniguchi, said, “Daiki was not involved in any criminal conduct and there is no evidence that he was. The government’s decision to single out Daiki (and other low-level ACM traders) is petty and unsubstantiated, but he prefers to move on with his life.”
Park, who is still pursuing his claim, was an analyst who worked in close proximity with Hwang daily and often appeared on the edge of his Zoom calls with traders, prosecutors said. As such, “Park had a front-row seat to Hwang’s manipulative trading strategy during the period of the offense conduct,” the government said.