Significant losses reported by Japan’s Nomura Holdings and Credit Suisse on Monday were linked to the unwinding of trades placed by Archegos Capital Management, according to media reports on Monday.

Nomura said on Monday it was evaluating the extent of its potential loss and trying to claim back US$2 billion from an unnamed client in the United States. Nomura’s shares plummeted by a record 16% in Tokyo.

The Swiss lender Credit Suisse also said it was facing a highly significant loss that could be “material to our first-quarter results.” Although the financial company did not name Archegos, it said a significant U.S. based hedge fund defaulted on its margin calls last week.

Nomura and Credit Suisse were among banks that provided prime brokerage services to Archegos, which was founded by former hedge fund manager Bill Hwang, according to reports by the Financial Times and Bloomberg News.

Another broker, Goldman Sachs, noted that any losses it faced from Archegos were likely to be immaterial as its loans to the hedge fund were fully collateralized, Bloomberg reported.

Last week, brokers made margin calls to Archegos after a dramatic drop in the share price of ViacomCBS, prompting the hedge fund to sell an estimated US$20 billion worth of U.S. and Chinese stocks in New York.

Archegos’ unwinding could send shock waves through the investment market, triggering other hedge funds to follow suit in a domino effect, said Eugene Law, a director at China Galaxy Securities.

Law said the level of transactions in Hong Kong’s stock market remains high, although the recent second listings of some mainland Chinese companies, including the video-sharing website Bilibili, which debuted on Monday, did not fare well.

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