%201.png)
.png)
.png)
Archegos Margin Call: What Happened and Why Wall Street is Shocked
Personal Finance
Heading 1
Heading 2
Heading 3
Heading 4
Heading 5
Heading 6
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Block quote
Ordered list
- Item 1
- Item 2
- Item 3
Unordered list
- Item A
- Item B
- Item C
Bold text
Emphasis
Superscript
Subscript
Categories
In what is being called “one of the single greatest losses of personal wealth in history,” Archegos Capital Management – owned by Bill Hwang – placed a high-flying bet on derivatives in ViacomCBS Inc, Discovery Inc., and GSX Techedu, and lost. Not only did the company lose an estimated $100 billion in value when their prices unexpectedly fell, but their margin call triggered a downturn in stock values that reverberated through other holding companies. Archegos (pronounced “Ar-chee-gos”) is the latest iteration of Tiger Asia, a company that Hwang started in 2001. The name change followed a $44 million settlement of civil allegations which the Wall Street Journal reported at the time. U.S. regulators had accused the company of insider trading of Chinese bank stocks, and after the company pled guilty they changed their structure to a family office and renamed the company. Industry insiders believe that Hwang – who was one of the eponymous “Tiger cubs” mentored by Tiger Management’s Julian Robertson – had been managing approximately $10 billion within his fund, which is far less than the equity exposure brought on by the margin call. To understand exactly what happened, you need to know what a margin call is. Investopedia describes it this way: “A margin call occurs when the value of an investor's margin account falls below the broker's required amount. An investor's margin account contains securities bought with borrowed money (typically a combination of the investor's own money and money borrowed from the investor's broker). A margin call refers specifically to a broker's demand that an investor deposit additional money or securities into the account so that it is brought up to the minimum value, known as the maintenance margin.” In this case, when Discovery and ViacomCBS stocks experienced their most dramatic tumble in their histories, Archegos’ creditors had to execute complex derivatives trades to offset the decline in value of their margin accounts. The impact was fast and far-reaching. Credit Suisse Group AG and Nomura Holdings Inc. both indicated that market turbulence had led to significant disruptions and losses, though they did not mention Archegos by name, and the Wall Street Journal reported that Mitsubishi UFJ Financial Group Inc. might lose $300 million, also without directly referencing Hwang’s company. Block trades, which are massive stock positions, had to be liquidated. The Wall Street Journal reported that the losses were equivalent to $30 billion in value, but others estimated that Hwang’s exposures may have been more than three times that amount. Michael Novogratz, an ex-hedge fund manager now at Galaxy Digital, told Bloomberg News, “I’ve never seen anything like this —how quiet it was, how concentrated, and how fast it disappeared,” he said. “This has to be one of the single greatest losses of personal wealth in history.” A company spokeswoman issued a statement saying, “This is a challenging time for the family office of Archegos Capital Management, our partners and employees. All plans are being discussed as Mr. Hwang and the team determines the best path forward.” Hwang himself did not return calls for comment. Following the activity, markets including the S&P 500 index, the Nasdaq Composite Index and the Dow Jones Industrial Average all ended Tuesday, March 30th lower, though the stocks at the heart of the episode closed significantly up.
.png)
.png)
Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
