NEW YORK, March 28 (Reuters) - A U.S. judge on Thursday

dismissed seven lawsuits by investors who accused Goldman Sachs

Group Inc ( GS ) and Morgan Stanley ( MS ) of misconduct that

fueled the rapid March 2021 collapse of Bill Hwang's $36 billion

firm Archegos Capital Management.

U.S. District Judge Jed Rakoff in Manhattan dismissed the

investors' market manipulation and insider trading claims with

prejudice, meaning they cannot be brought again.

A different judge had dismissed the lawsuits last March, but

let the investors sue Goldman and Morgan Stanley ( MS ) again. The Wall

Street banks had been two of Archegos' prime brokers.

Archegos' collapse stemmed from Hwang's use of financial

contracts known as total return swaps to take outsized stakes in

his favorite holdings including ViacomCBS, Discovery and Baidu ( BIDU )

, building an estimated $160 billion of stock exposure.

Investors in Hwang's stocks sought to hold Goldman and

Morgan Stanley ( MS ) liable for selling those stocks, based on their

inside knowledge that Hwang would also be a seller because he

was unable to meet margin calls.

The investors said the combined selling saddled them with

huge losses, while Goldman and Morgan Stanley ( MS ) escaped billions

of dollars of losses of their own.

In a one-paragraph order, Rakoff did not explain his

reasoning and said an opinion would follow in due course.

Lawyers representing the investors did not immediately

respond to requests for comment. Goldman did not immediately

respond to similar requests. Morgan Stanley ( MS ) declined to comment.

Archegos' collapse caused billions of dollars in losses for

banks such as Credit Suisse, which was later bought by Swiss

rival UBS, and Japan's Nomura Holdings ( NMR ).

Hwang and former Archegos Chief Financial Officer Patrick

Halligan face a scheduled May 8 criminal trial in Manhattan over

their roles in the collapse.

Both pleaded not guilty to securities fraud, wire fraud and

racketeering conspiracy charges. Hwang has also pleaded not

guilty to separate market manipulation charges. The trial could

last months.

The investor lawsuits in the U.S. District Court, Southern

District of New York are Tan v. Goldman Sachs Group Inc ( GS ) et al,

No. 21-08413; Florio v. Goldman Sachs Group Inc ( GS ) et al, No.

21-08618; Merson v. Goldman Sachs Group Inc ( GS ) et al, No. 21-08752;

Ulanch v. Goldman Sachs Group Inc ( GS ) et al, No. 21-08897; Felix v.

Goldman Sachs Group Inc ( GS ) et al, No. 21-10286; Scully v. Goldman

Sachs Group Inc ( GS ) et al, No. 21-10791, and Lee v. Goldman Sachs

Group Inc ( GS ) et al, No. 22-00169.