(Bloomberg) -- One of the prosecution’s star witnesses against Archegos Capital Management founder Bill Hwang acknowledged on cross-examination that he had something of a beef with the other key witness.

Scott Becker, Archegos’ former risk management head, has been on the stand since Monday but faced his first questioning by defense lawyers on Wednesday. Hwang’s lawyer, Barry Berke, asked Becker if he believed former Archegos head trader William Tomita often took credit for his work.

Wasn’t Becker so angry about it at one point that he “wished upon Mr. Tomita some nasty and unspeakable act?” Berke asked. That question drew an objection, but Becker answered a different version of it.

“I may have vented to my peers,” Becker said, though he said he didn’t recall being angry. Tomita is expected to take the stand for the prosecution in the coming weeks.

The apparent bad blood between the two could undermine the prosecution’s depiction of a “corrupt core” at Archegos including Hwang, co-defendant Patrick Halligan, Tomita and Becker that conspired to mislead banks into fueling a massive bubble that burst in March 2021. The blowup obliterated Hwang’s $36 billion fortune, cost counterparties $10 billion and contributed to last year’s failure of Credit Suisse Group AG.

Earlier on Wednesday, Becker offered further testimony that he was directed to lie to banks including UBS Group AG about Archegos’ financial condition. The jury was shown a March 25, 2021, Bloomberg chat exchange in which Halligan, the family office’s chief financial officer, told Becker to “just deflect” questions in a call with Credit Suisse while asking for more time to meet margin calls. 

Becker said the CFO also told him to say he didn’t have access to the firm’s portfolio, its trade blotter or the total of the margin calls Archegos was facing, even though he did.

Becker’s issues with Tomita came up after Berke began his cross-examination. The lawyer asked Becker if he believed Tomita lied to Hwang to burnish his own image and pad his bonus.  

“I think I may have said that at some point,” Becker said.

Both Becker and Tomita pleaded guilty to felonies in 2022 and agreed to cooperate with the government. They each face decades in prison, but Becker said on the stand that he hopes to avoid prison by cooperating with prosecutors.

‘Personal Vendetta’

Tomita may not be the only member of the inner circle with whom Becker had issues. One of Becker’s former team members testified last week that he observed friction between the risk head and Halligan, his direct boss. 

“He sometimes would just vent about, you know, the stuff that, you know, Patrick is asking him to do or just sometimes vent about the personal vendetta with Pat,” former Archegos operations staffer Jesse Martz said of Becker.

“He didn’t like his boss?” US District Judge Alvin Hellerstein asked Martz. 

“Yeah, that’s kind of the sense that I was getting,” Martz testified.

Evidence that Becker didn’t get along with others in the alleged conspiracy could help the defense suggest to the jury that he has his own motivations to lie. Lawyers for Halligan are expected to hit Becker hard on cross-examination starting Thursday. In her opening statement, Halligan lawyer Mary Mulligan called Becker manipulative and a “very, very convincing” liar.

Telling Lies

Berke stressed Becker’s limited interactions with Hwang. Becker acknowledged on the stand that he didn’t recall Hwang ever explicitly telling him to lie to banks but pointed out that the founder was on a March 24, 2021, Zoom call in which false talking points for counterparties were discussed. 

“The talking points discussed on that call were lies,” Becker said. “Mr. Hwang was on that call.” 

Berke suggested that Hwang only gave Becker general guidance on portfolio secrecy and that Becker decided on his own to lie. 

“You know the difference between keeping things confidential and telling lies, don’t you?” Berke asked.

Berke also took aim at Becker’s previous testimony that Archegos had a top-down culture in which Hwang “made all the decisions” and didn’t tolerate any disagreement. The defense lawyer noted that Becker testified on Tuesday that he turned down a March 19, 2021, request to come to Hwang’s Manhattan apartment to work on a weekend project because he was burned out from Archegos’ nonstop trading.

‘Very Aggressive Trader’

“Isn’t it the case your boss Bill Hwang said he wanted to meet on the weekend and you said, ‘No way, I’m not going into the city?’” Berke asked. 

Becker responded that he told Tomita he wasn’t going and that he didn’t know how the trader dealt with Hwang.

During his questioning of Becker, Berke sought to cast Hwang’s trading and other conduct at Archegos as normal and perfectly innocent. Becker agreed with Berke that Hwang had always been “a very aggressive trader in stocks he believed in.” 

Berke also suggested that Archegos’ portfolio secrecy wasn’t nefarious but was driven by fears of being targeted in a short squeeze by meme-stock investors in early 2021. He asked Becker if he recalled discussing the issue with members of his team and wondering who the meme-stock crowd would “hammer next” after Melvin Capital, the now-defunct hedge fund famously targeted over its GameStop Corp. short.

What’s a Meme Stock?

“I may have said that,” Becker said.

But the judge interrupted the exchange with this own question. 

“What do you mean by meme?” asked Hellerstein. 

The 90-year-old judge, who had earlier announced to the court that he just became a great-grandfather, proceeded to quiz Becker about the meme-stock phenomenon. 

“Many of the securities that this group of investors had invested in were securities who typically, generally, by professional investors weren’t looked upon fondly, like Gamestop,” Becker explained. 

“But you don’t know why they were called memes,” Hellerstein pressed.

“There’s a popular cultural reference to the term meme,” Becker said.

The case is US v. Hwang, 22-cr-00240, US District Court, Southern District of New York (Manhattan).

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