Archegos Employees Lose $500 Million As Bonus Fund Evaporates

Yet some former employees have not received any of their deferred pay, including the original sums. One person close to the firm told the FT that “the money is gone” with “no pot of gold to pay them from”. Another said Archegos employees “are in a difficult position” and “warrant sympathy”.

A representative for Archegos declined to comment.

Unfortunately, if they want their money back, Bill Hwang's former employees will need to wait in a pretty lengthy line.

Former employees of Hwang’s family office would have to queue with other creditors if the firm enters insolvency, a person close to Archegos said. Archegos has hired restructuring advisers to assess potential legal claims from banks, which are attempting to recoup some of the money they lost on its soured bets and plan for a possible wind-down of the business.

David Pauker, a financial adviser who has worked on large bankruptcies including Lehman Brothers, has been recruited as Archegos’s chief restructuring officer, according to his profile on the social network LinkedIn. Pauker declined to comment.

At this point, the DoJ might take action against Hwang before creditors see any money  (this isn't the first time Hwang has been on the radar of authorities).

The DoJ has opened an investigation into into Archegos and has asked its prime brokers for information about the trades, which relied on a derivative known as a "Total Return Swap", which only required Archegos to post margin, while the prime brokers entered into the positions on behalf of the firm.

With Hwang's entire $20 billion fortunate said to have evaporated during the selloff, getting their deferred comp back will be like getting blood from a stone.

And just like that...

...it's gooone.

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