Bloomberg: Texas Capital's stock influenced by secret investment – Dallas Business Journal – Dallas Business Journal






A Dallas-based bank’s stock volatility has been tied to one hedge fund’s demise, according to a story by Bloomberg.
Texas Capital saw its stock surge and plummet the past year as a former hedge fund giant, Archegos Capital Management, built an undisclosed more-than-20% stake in the company, Bloomberg reported Thursday.
Bill Hwang of Archegos Capital Management used derivatives to build a position in the company and his hedge fund and the bank “had private conversations about a significant investment that wasn’t revealed to other shareholders,” Bloomberg reported, citing anonymous sources.
Representatives of Texas Capital Bank did not immediately respond to requests for comment from the Dallas Business Journal.
According to the Bloomberg report, spokespeople for Archegos, Texas Capital, Credit Suisse and Morgan Stanley declined to comment.
The story by Bloomberg outlines Hwang’s involvement in the regional bank, detailing behavior that eventually led to the bank’s stock surging ahead of a capital raise and then plummeting when Archegos fell apart.
The situation could be a concern to regulators who warn against influencing deposit institutions and stands as an example of what could happen when a large shareholder suddenly pulls out in investing in a lender, Bloomberg wrote.
“It goes against the intent of what the regulations and laws were set up for,” Bill Dudley, the former New York Federal Reserve President told Bloomberg. “If people go around and circumvent those laws and regulations, then you have a problem, and you’ve got to do something about it.”
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