Wing Chau, CDO Manager in ‘Big Short,’ Reaches SEC Settlement

Wing F. Chau, the bond manager who sued Michael Lewis over his depiction in the “The Big Short,” agreed to settle a U.S. regulator’s claims that he violated his fiduciary duty in managing structured products before the 2008 financial crisis.

Chau acted negligently in picking assets of certain collateralized debt obligations after pressure from Merrill Lynch & Co., which structured the deal, and a direct request from hedge fund Magnetar, according to a Securities and Exchange Commission order released Sept. 27. The hedge fund’s involvement was unknown to investors, the SEC said.

Michael Lewis

Photographer: David Paul Morris/Bloomberg

Chau agreed to pay a $90,000 ...