Credit Suisse execs at the heart of the bank's Archegos loss will reportedly depart following $4.7 billion hit
Reuters
- Two Credit Suisse executives will leave in wake of the collapse of Archegos Capital Management, according to a Wall Street Journal report on Monday
- The executives were the co-heads of a unit that managed the relationship between the Swiss lender and now-failed hedge fund.
- Credit Suisse took a $4.7 billion quarterly charge tied to the missed margin calls by Archegos.
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Two executives at Credit Suisse Group in charge of its prime brokerage unit will leave after the Swiss lender took a $4.7 billion loss tied to the collapse of hedge fund Archegos Capital Management, according to a report Monday.
John Dabbs and Ryan Nelson will immediately step down as co-heads of prime services, The Wall Street Journal reported, citing an internal memo at Credit Suisse. Dabbs and Nelson will assist in an orderly transition through mid-May.
Archegos, a family investment firm run by former "Tiger cub" Bill Hwang, collapsed after it missed margin calls on large, concentrated stock positions at the end of March. Credit Suisse earlier this month warned of a potential $4.7 billion charge to its first-quarter profit following the failure of a US-based hedge fund.
The bank has started an internal investigation into what went wrong related to Archegos. The prime brokerage unit managed the relationship with Archegos and allowed the investor to accumulate substantial leveraged positions in individual stocks, WSJ reported.
Credit Suisse pushed out its top risk officer and the head of its investment bank this month and several other employees working in equities and risk management have left, the report said.
Archegos used equity-swap agreements to take on massive leverage and make concentrated bets on a few stocks such as ViacomCBS and Discovery.