U.S. Senate Banking Committee Probes Family Office Businesses
Credit Suisse, Nomura and other global banks have received inquiries from members of the U.S. Senate Banking Committee on various Archegos-related matters including their relationship and business dealings with family offices.
Senator Sherrod Brown, Democratic chair of the committee, requested information from global banks involved in the collapse of Bill Hwang’s New York-based family office in a letter published on his website.
The letter was sent not only to those that suffered damages with Goldman Sachs and Morgan Stanley also receiving the inquiry.
«I am troubled, but not surprised, by the news reports that Archegos entered into risky derivatives transactions facilitated by major investment banks,» Brown wrote.
Family Office Inquiry
In addition to the banks' relationship with Archegos, Brown also made inquiries about sign-offs from supervisors or risk committees on related dealigns given Hwang’s history and previous violations with the Securities and Exchange Commission.
Brown’s letter also asked for details on how banks do business with family offices – a key issue due to relatively lighter regulatory oversight on such entities despite some of them proven to be of equal scale with large hedge funds.
Family office-related inquiries spanned across know-your-client processes, onboarding, product or service offering and financing.
