"As Wall Street last week struggled to grasp what was happening, some analysts pointed to a wider market correction. But over the weekend, it emerged that the selling was the result of Goldman Sachs and Morgan Stanley unloading big block trades because Archegos had borrowed money for trades and wasn’t able to make good on its debts when the banks asked for more capital to cover losses, known as a margin call. Morgan Stanley and Goldman Sachs did not comment, although Morgan Stanley has reported told investors it sold $15 billion worth of blocks in the last few days and has no more blocks to sell, according to CNBC. In Archegos’ case, the firm used derivatives contracts with brokers, or swaps, to supercharge his trades, Bloomberg reported. But Hwang was forced by his bankers to sell more than $20 billion worth of shares after some trading positions moved against him, Bloomberg said". I bet if SEC has any muscle to check GS' and MS' trading accounts in Puerto Rico, they would find these accounts held some big short positions in VIAC, DISCA right before the margin calls were executed. Bill Hwang was sleeping with foxes, he thought he'd be safe ; the pathetic part was he borrowed money from the foxes to build the positions up, then they turned around to bite his head off. was there altruism on Wall Street? Did you Bill Hwang is Korean descent, possibly SamSung's, Huyndai's, Chaebols', even Masayoshi Son's moneys were lost in the trade.
Only really on the short side. On the long side it seems (based on the article linked below) that margin requirements were incorrectly calculated and set extremely low, because the. oil price was 1 cent and the IB risk management Algo was configured in a way it believed oil prices couldn't go negative and so allowed traders to use huge leverage on the long side. So this trader, Shah, for example was able to buy hundreds of crude oil contracts although he only had $77,000 in his account. "At midnight, Shah got some very bad news: he owed Interactive Brokers $9 million. He’d started the day with $77,000 in his account, expecting that his biggest possible loss was 100%, or $77,000. It turned out to be 116 times that number" https://finance.yahoo.com/news/oil-trader-owes-9-million-210000529.html Now imagine if this guy had had $77 million (or even just $7 million) in his account instead of $77 thousand. You can do the math. He could of caused IB to have huge losses.