Investors on Wednesday tallied the fallout from Archegos Capital’s dramatic meltdown, with Nomura and Credit Suisse shares losing a collective US$9 billion while heightened scrutiny of the hedge fund industry loomed, Reuters reports.

The downfall of Archegos, a family office run by former Tiger Asia manager Bill Hwang, has rocked a handful of stocks that have been linked to the fund’s massive margin call while weighing on shares of banks that did business with the New York-based fund.

Investors said it could also increase scrutiny of family offices while making money managers more wary of holding stocks that have experienced large, unexplained moves like many of the shares linked with Archegos’ margin call did.

“For the time being it appears as though this was an isolated instance of using too much leverage,” said Art Hogan, chief market strategist at National Securities in New York.

“We’re gonna be hyper vigilant to make sure that there’s not a plethora of other cases with family offices using too much leverage,” he added.

Credit Suisse and Nomura were slower than rivals to cut their exposure to the fund. Global lenders that acted as brokers for Archegos may have to write down more US$6 billion after the fund defaulted on payments, Reuters has reported.

Credit Suisse shares fell by 4 percent on Wednesday, bringing this week’s decline to nearly 20%. Already under pressure from its exposure to failed supply chain finance firm Greensill, Credit Suisse’s plans to buy back shares and pay dividends this year could now be at risk, analysts said.

The bank’s market capitalization has shrunk by five billion Swiss francs since Friday to 25.57 billion Swiss francs (US$27.12 billion). Sources estimated Credit Suisse’s losses may total US$5 billion, but the bank declined to comment.

UBS analysts said “a lot of unanswered questions” remained, referring to Credit Suisse’s involvement first in Greensill and now the U.S.-based hedge fund.

The four largest Credit Suisse bonds outstanding have in the last two days hit their lowest price since the summer.

Meanwhile, Nomura which has warned of a US$2 billion hit from Archegos, fell a further 2.9 percent following a 0.8 percent fall on Japanese stock markets on Wednesday. Its market capitalization has dropped from 2.3 trillion yen (US$20.81 billion) to 1.88 trillion yen since Friday, Refinitiv data showed.

The episode could lead to regulatory changes that treat family offices like hedge funds and oblige them to report their holdings, Hogan said.

U.S. Treasury Secretary Janet Yellen announced on Wednesday that she is reviving a regulatory working group to study risks that hedge funds pose to the financial system.

Sung Kook 'Bill' Hwang pleaded guilty to wire fraud relating to illegal trading of Chinese bank stocks and separately paid US$44 million to U.S authorities to settle insider trading charges in 2012.

Nomura, Credit Suisse take US$9b hit from Bill Hwang's Archegos fund meltdown