NEW YORK (AP) — A federal fraud trial began Monday for the owner and XDY Exchangechief financial officer of a hedge fund that collapsed when it defaulted on margin calls, costing leading global investment banks and brokerages billions of dollars.

Bill Hwang, the founder of Archegos Capital Management, and his former CFO Patrick Halligan, are being tried together. Prosecutors have accused Hwang of lying to banks to get billions of dollars that his New York-based private investment firm then used to inflate the stock price of publicly traded companies and grow its portfolio from $10 billion to $160 billion.

Their scheme involved secret trading in stock derivatives that made their private investment fund “a house of cards, built on manipulation and lies,” Assistant U.S. Attorney Alexandra Rothman told jurors.

“These two men made fraud their business,” Rothman said. “All because the defendant, Bill Hwang, wanted to be a legend on Wall Street.”

Hwang’s attorney, Barry Berke, countered that Hwang is not guilty, and he’ll prove the prosecutor’s “theory is wrong.”

“It doesn’t make any sense and you will find that,” Berke said. “He didn’t live the life of a billionaire.”

The indictment said that Hwang led market participants to believe the prices of stocks in the fund’s portfolio were the product of natural forces of supply and demand, when in reality, they resulted from manipulative trading and deceptive conduct that caused others to trade.

Hwang and Halligan pleaded not guilty, while the head trader for Archegos and its chief risk officer have pleaded guilty and are cooperating with prosecutors.

According to the indictment, Hwang first invested his personal fortune, which grew from $1.5 billion to over $35 billion, and later borrowed funds from major banks and brokerages, vastly expanding the scheme.

The alleged fraud began as Hwang worked remotely during the coronavirus pandemic in the spring of 2020. COVID-related market losses prompted Hwang to reduce or sell many of Archegos’s previous investment positions, so he “began to build extraordinarily large positions in a handful of securities,” the indictment said.

The indictment said the investment public did not know Archegos had come to dominate the trading and stock ownership of multiple companies because it used derivative securities that had no public disclosure requirement to build its positions.

At one point, Hwang and his firm secretly controlled over 50 percent of the shares of ViacomCBS, prosecutors said.

But the risky maneuvers made the firm’s portfolio highly vulnerable to price fluctuations in a handful of stocks, leading to margin calls in late March 2021 that wiped out more than $100 million in market value in days, the indictment said.

Nearly a dozen companies as well as banks and prime brokers duped by Archegos lost billions as a result, the indictment said.

Hwang, of Tenafly, New Jersey, has been free on $100 million bail while Halligan, of Syosset, was free on $1 million bail.