The U.S. Securities and Exchange Commission opened a preliminary investigation into Bill Hwang over his leveraged trades that have roiled Wall Street.

The SEC started the civil probe in recent days after Hwang’s Archegos Capital Management made a series of wrong-way wagers that prompted brokers to liquidate his positions, said a person familiar with the matter, who asked not to be named because the inquiry isn’t public. The examination is in its early stages and is being led by the asset-management group in the SEC’s enforcement division.

It’s fairly routine after a major market blowup for the SEC to launch a review. The probe may not lead to any allegations of wrongdoing.

A spokesperson for Hwang didn’t immediately respond to a phone call or an email seeking comment. An SEC spokeswoman declined to comment.

After some positions moved against him last week, Hwang was forced to put up more collateral. He ultimately faced margin calls that he couldn’t meet, prompting banks including Goldman Sachs Group Inc. to unwind his positions through a series of block trades. That sent shares of companies including ViacomCBS Inc., Baidu Inc. and Tencent Music Entertainment tumbling.

Credit Suisse Group AG and Nomura Holdings Inc., which served as brokers for Hwang’s wagers and lent him huge sums of money, are now warning shareholders that they face “significant” losses. Goldman was ahead of the pack in cutting exposure and expects any impact on its financial results to be immaterial, people familiar with the matter have said.

Hwang has been in the SEC’s crosshairs before. In 2012, his former hedge fund, Tiger Asia Management, pleaded guilty and paid more than US$60 million in penalties after the SEC and U.S. prosecutors accused it of trading on illegal tips about Chinese banks. Hwang opened Archegos, a family office, following the sanctions, as the SEC kicked him out of the hedge fund industry by banning him from managing money on behalf of clients.

The Archegos blowup has prompted questions about regulatory oversight, particularly because Hwang amassed tens of billions of dollars in stock bets, while not disclosing his positions to other market participants. He did so by entering into swaps transactions with banks, deals that can allow investors to get exposure to price moves without buying shares.

As a family office, Hwang was also exempt from registering with the SEC or filing a confidential document with the agency known as form PF that is required of hedge funds and private-equity firms. The filing is meant to help regulators assess any risks that companies pose to the financial system.