The alleged fraudulent founder of Archegos Capital Management will face trial in the US after a judge dismissed his efforts to dismiss an indictment.

Archegos founder Bill Hwang was indicted and arrested in April 2022 on federal charges of fraud and racketeering after the collapse of the firm which at one point was valued at $36 billion.

The founder’s lawyers had argued that the 11-count case should be thrown out on grounds that prosecutors deceived Hwang into cooperating with their probe over the course of six months. They also argued that his trading activity had been lawful.

US District Judge Alvin Hellerstein said that prosecutorial misconduct could only be used as a reason for dismissal if it substantially influenced the grand jury’s decision to indict and ultimately concluded that “There is no support in the record for such a finding.”

Hellerstein also rejected a dismissal request from former Archegos chief financial officer Patrick Halligan.

Archegos spectacularly collapsed in March 2021, losing billions for banks including Credit Suisse and Nomura Holdings. In the wake of the collapse, allegations emerged accusing Hwang of borrowing aggressively and using total return swaps to artificially boost Archegos' in certain stocks. Authorities claimed that Hwang concealed the size and riskiness of his bets.

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