NEW YORK, July 14 (Reuters) - Morgan Stanley ( MS ),

Goldman Sachs ( GS ) and Wells Fargo ( WFC ) will pay a total of

$120 million to settle a lawsuit claiming they hid conflicts of

interest while sales of ViacomCBS shares helped fuel the

collapse of Bill Hwang's Archegos Capital Management.

A proposed final settlement with former shareholders of

ViacomCBS, now known as Paramount Global ( PARAA ), was filed

this month in New York state court in Manhattan; it requires a

judge's approval.

Archegos, a family office that once managed $36 billion,

imploded in March 2021 when Hwang could not meet margin calls on

bank loans he obtained to make large bets in ViacomCBS and other

media and technology stocks.

Investors led by the Camelot Event Driven Fund and the

Municipal Police Employees' Retirement System of Baton Rouge,

Louisiana, accused banks of hiding their roles as Archegos

counterparties and dumping their shares to avoid losses.

The defendants served as prime brokers for Archegos, which

had about $20 billion of ViacomCBS exposure and had helped

underwrite ViacomCBS common and preferred stock offerings in

March 2021.

Morgan Stanley ( MS ), Goldman and Wells Fargo ( WFC ) denied wrongdoing in

agreeing to settle, according to a court filing dated July 1.

It was unclear how much each would pay, but Morgan

Stanley ( MS ) handled about 45% of the offerings and the other banks

handled much less. All declined to comment on Monday.

Many other defendants were previously dismissed. Some court

papers had been kept under seal. Bloomberg News reported the

settlement earlier on Monday.

ViacomCBS common stock and preferred stock investors would

receive $75 million and $45 million, respectively, minus legal

fees and expenses, court papers show.

Their lawyers plan to seek 29% of the settlement fund, or

about $35 million, for fees, the papers show.

Hwang and former Archegos chief financial officer Patrick

Halligan were convicted of fraud in July last year over the

firm's collapse and sentenced to 18 years and eight years in

prison, respectively. Both are appealing and free on bail.

The case is Camelot Event Driven Fund et al v Morgan Stanley ( MS )

& Co et al, New York State Supreme Court, New York County, No.

654959/2021.