Wells Fargo, Goldman Sachs and Morgan Stanley Paying $120,000,000 To Settle Lawsuit Tied to Investment Firms Collapse: Report

Wells Fargo, Goldman Sachs, and Morgan Stanley will collectively pay $120 million to settle a lawsuit related to the 2021 collapse of Archegos Capital Management. The lawsuit, filed by former ViacomCBS (now Paramount Global) shareholders, alleges that the banks hid conflicts of interest while selling ViacomCBS shares, contributing to Archegos' downfall. Archegos, a family office managing $36 billion, collapsed after its leveraged bets on ViacomCBS and other companies soured. The banks allegedly helped Archegos make these bets while also acting as underwriters for ViacomCBS. Investors claim the banks concealed their relationship with Archegos and sold their own shares to avoid losses. The settlement, which is pending court approval, involves the banks denying any wrongdoing. Bill Hwang, the founder of Archegos, and former CFO Patrick Halligan were convicted of fraud and sentenced to prison in 2024, though they are appealing.