Archegos Bill Hwang sentenced to 18 years in prison for major fraud in the US | Crime News

Hwang was convicted in July of 10 felony counts including wire and securities fraud, market manipulation.

Former billionaire investor Sung Kook “Bill” Hwang has been sentenced to 18 years in prison for the collapse of Archegos Capital Management, which cost Wall Street banks more than $10bn.

Hwang was sentenced Wednesday by United States District Judge Alvin Hellerstein in Manhattan, where the jury convicted Hwang in July of 10 counts including racketeering, mortgage fraud and market manipulation.

“The amount of loss caused by your conduct is greater than any other loss I have faced,” Hellerstein said before announcing the sentence.

Archegos’ March 2021 filing took less than a week, surprising Wall Street and Hwang’s lenders.

The US Attorney’s office in Manhattan has sought a 21-year prison sentence for Hwang – an unusually long term for his case – and that he pay $12.35bn in restitution and restitution to victims.

“It’s among the rarest of cases that can be described as a national tragedy,” prosecutor Andrew Thomas said during Hellerstein’s sentencing hearing.

Hellerstein did not reach a decision Wednesday on whether Hwang should release the money or pay. The sentencing hearing is expected to continue on Thursday.

Before sentencing Hwang, Hellerstein asked the defendant’s lawyer, Dani James, what he thought of Hwang compared to Sam Bankman-Fried, who was sentenced in March to 25 years in prison for stealing $8bn from users of the now-defunct FTX exchange.

“Mr. Bankman-Fried was literally stealing from his customers,” said James. “I don’t think that’s what happened here.”

Hwang had not asked for arrest, forfeiture or extradition, and remained free on bail while he appealed his case. James said his low risk of committing further crimes meant that a longer prison term would be of little benefit.

“The idea that he’s going to commit a crime in the future, that’s not the case,” said James.

Bankman-Fried pleaded not guilty and is appealing his sentence.

Aggressive lending

Hwang, 60, was a member of the late billionaire hedge fund Julian Robertson.

He founded Archegos in New York as a family office in 2013, a year after his former hedge fund Tiger Asia Management pleaded guilty to fraud in an insider trading case.

Prosecutors accused Hwang of lying to banks about the Archegos portfolio in order to aggressively borrow money and make big bets on media and technology stocks like ViacomCBS, now Paramount Global.

While Archegos eventually managed $36bn, Hwang’s borrowing helped him amass $160bn of stock exposure.

His downfall came when Hwang was unable to meet margin calls, as the prices of some of his favorite stocks began to fall and various banks reduced the stocks they had backed in so-called total return swaps.

More than $100bn of market value in Hwang’s stock was wiped out. Several banks suffered losses, including Credit Suisse, which lost $5.5bn, and Nomura Holdings. Credit Suisse is now part of UBS.

Hwang’s lawyers’ plea for impunity also highlighted Hwang’s Christian faith and his nonprofit Grace and Mercy Foundation, which, since 2006, has donated at least $600 million to fight homelessness, poverty and human trafficking, among other causes.

In a statement sent to the court before Hellerstein announced the sentence, Hwang said he hoped the punishment would “allow me to function as best I can under the circumstances”.

Hwang’s lawyers say his net worth has dropped to “approximately” $55.3m.

Hwang’s co-defendant, former Archegos chief financial officer Patrick Halligan, was convicted of the same crime on three counts. His sentencing is scheduled for January 27. Both chose not to testify in their two-month trial.