Archegos 2021
Archegos was a family-office total-return-swap blow-up in March 2021: concentrated longs, huge hidden leverage across prime brokers, and a week of block sales that hit ViacomCBS and others.
Definition
Total-return swaps let Archegos run equity risk off balance sheet with multiple primes who did not see the whole. When names reversed, margin calls cascaded; some banks dumped faster than others. Credit Suisse and Nomura took the largest public hits.
Why it matters
It is the modern ‘hidden book’ problem: same underlying, many legal wrappers, no consolidated exposure. Fails the ‘know your counterparty’s other primes’ test.
Case
Late March 2021 block trades, single-name gaps, and later FINMA/Fed consent orders on prime risk. Not systemic — expensive for the slow banks.
How to read it
Ask for look-through of TRS/CFD books and whether haircuts assume the name is only at your shop. If the answer is a shrug, you are the stuffed prime.