The Real Risks of the Archegos Saga

April 1, 2021

By: Howard A. Fischer

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As a former Securities and Exchange Commission senior trial counsel who has dealt with his share of emergencies resulting from investment fund implosions, I have been monitoring the conflagration devouring Archegos Capital Management over the last few days. I joined the SEC in the aftermath of the financial crisis and tend to view large-scale collapses through that lens. I am focused on two issues: First, was the fact that Archegos was a family office a factor in the collapse, and does that collapse justify greater regulatory scrutiny of family offices? Second, does this collapse present the archetypical regulatory nightmare: previously unperceived interconnected risks that threaten multiple financial institutions, as well as the smooth functioning of the market at large?