Federal regulators say they are closing in on a deal with Archegos Capital Management founder Bill Hwang, telling a Manhattan federal judge on Friday that settlement talks in the Securities and Exchange Commission’s civil case have been “very productive.” After years of legal back-and-forth over the 2021 Archegos meltdown, the update is the clearest sign yet that the saga may finally be heading toward a negotiated finish.
According to Reuters, the SEC and defense counsel filed a joint letter in Manhattan federal court describing the settlement discussions as “very productive” and asking the judge to set May 13, 2026 as the deadline for their next status report on negotiations.
Background
The SEC’s civil case stems from Archegos’s spectacular collapse in March 2021, which regulators tie to Hwang’s use of total-return swaps to build huge, highly concentrated positions in a small cluster of media and technology stocks. As laid out by the SEC, those derivatives helped Archegos quietly accumulate an estimated $160 billion in exposure at its peak, even as the family office’s reported portfolio hovered around roughly $36 billion. The structure, according to the agency, masked the true size of Archegos’s bets, kept the positions out of standard disclosure channels and left its counterparties painfully exposed when margin calls hit.
Criminal fallout
The criminal side of the Archegos story has already produced stiff prison terms. The U.S. Attorney’s Office for the Southern District of New York said Hwang was convicted in July 2024 and received an 18-year sentence in December 2024, along with an order to pay more than $9 billion in restitution, according to a Justice Department press release. His former chief financial officer, Patrick Halligan, was sentenced to eight years in prison in January 2025, as reported by Bloomberg.
Settlement talks and who is next
Reuters also reports that SEC staff have agreed in principle to settle civil claims against former Archegos chief risk officer Scott Becker and former head trader William Tomita. The same joint letter asked the court to set a May 13, 2026 reporting date, giving the parties time to lock in any agreements and spell out for the judge what issues, if any, remain.
Legal implications
A civil settlement in the SEC case would be expected to address disgorgement, monetary penalties and potential injunctions, but it would sit alongside, not instead of, the criminal sentences and restitution already imposed. The Justice Department has already sought more than $9 billion in restitution from Hwang, according to the DOJ, while the SEC’s enforcement filings detail how the total-return swap strategy obscured Archegos’s true market footprint. Any deals with former Archegos executives could narrow the roster of defendants still facing SEC claims, although they would not come close to restoring the billions that counterparties and some investors lost in the 2021 collapse.
What to watch
For now, the key date is on the court’s calendar. The parties have asked to report back by mid May 2026, and any finalized settlements would need to be presented to the judge for review. Market watchers and legal observers alike will be looking to see whether the eventual terms include penalties that feel proportionate to the havoc unleashed when Archegos’s trades unraveled in March 2021.
