Archegos’s Bill Hwang sentenced to 18 years in prison for massive US fraud

Hwang had been convicted successful July connected 10 transgression charges including ligament and securities fraud, marketplace manipulation.

Former billionaire capitalist Sung Kook “Bill” Hwang has been sentenced to 18 years successful situation implicit the illness of Archegos Capital Management, which outgo Wall Street banks much than $10bn.

Hwang was sentenced connected Wednesday by United States District Judge Alvin Hellerstein successful Manhattan, wherever a assemblage convicted Hwang successful July connected 10 transgression charges including ligament fraud, securities fraud and marketplace manipulation.

“The magnitude of losses that were caused by your behaviour are larger than immoderate different losses I person dealt with,” Hellerstein said earlier announcing the sentence.

Archegos’s March 2021 implosion took little than a week, stunning Wall Street and Hwang’s lenders.

The US Attorney’s bureau successful Manhattan sought a 21-year situation word for Hwang – unusually agelong for a white-collar lawsuit – and for him to forfeit $12.35bn and marque restitution to victims.

“It stands among a uncommon people of cases that genuinely could beryllium described arsenic a nationalist calamity,” authoritative Andrew Thomas said astatine the sentencing proceeding earlier Hellerstein.

Hellerstein did not scope a determination connected Wednesday connected whether Hwang indispensable forfeit wealth oregon wage restitution. The sentencing proceeding is expected to resume connected Thursday.

Before sentencing Hwang, Hellerstein asked the defendant’s lawyer, Dani James, however she thought Hwang compared to Sam Bankman-Fried, who was sentenced successful March to 25 years successful situation for stealing $8bn from users of the now-bankrupt FTX exchange.

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

Hwang had asked for nary prison, forfeiture oregon restitution, and to stay escaped connected bail portion helium appealed his conviction. James said his debased hazard of committing much crimes meant a lengthy situation word served nary purpose.

“The conception that helium would perpetrate a transgression successful the future, it’s conscionable not so,” James said.

Bankman-Fried denies wrongdoing and is appealing his conviction.

Aggressive borrowing

Hwang, 60, was a protege of precocious hedge-fund billionaire Julian Robertson.

He acceptable up Archegos successful New York arsenic a household bureau successful 2013, the twelvemonth aft his erstwhile hedge money Tiger Asia Management pleaded blameworthy to ligament fraud successful an insider trading case.

Prosecutors accused Hwang of lying to banks astir Archegos’s portfolio truthful helium could get wealth aggressively and marque concentrated bets connected media and exertion stocks specified arsenic ViacomCBS, present called Paramount Global.

While Archegos yet managed $36bn, Hwang’s borrowing helped him amass $160bn of vulnerability to stocks.

His downfall occurred erstwhile Hwang was incapable to conscionable borderline calls, arsenic the prices of immoderate of his favourite stocks began falling and assorted banks unloaded stocks that had backed his alleged full instrumentality swaps.

More than $100bn of marketplace worth successful Hwang’s stocks was wiped out. Several banks suffered losses, including Credit Suisse, which mislaid $5.5bn, and Nomura Holdings. Credit Suisse is present portion of UBS.

Hwang’s lawyers’ petition for nary punishment besides cited Hwang’s Christian religion and his nonprofit Grace and Mercy Foundation, which has, since 2006, donated astatine slightest $600m to combat homelessness, poorness and quality trafficking, among different causes.

In a connection to the tribunal earlier Hellerstein announced the sentence, Hwang said helium hoped the punishment would “allow maine to service arsenic overmuch arsenic I tin fixed the circumstances”.

Hwang’s lawyers person said his nett worthy has fallen to “at most” $55.3m.

Hwang’s co-defendant, erstwhile Archegos Chief Financial Officer Patrick Halligan, was convicted astatine the aforesaid proceedings connected 3 transgression charges. His sentencing is scheduled for January 27. Both chose not to attest astatine their two-month trial.