Ex-Billionaire Bill Hwang Faces Prison for Archegos Fraud 

United States: Bill Hwang, the ex-billion-dollar fund manager, is to be severely punished after the Archegos Capital Management he ran generated over USD 10 billion in losses to the Wall Street banks. Hwang was convicted in July of the ten criminal counts including wire fraud, securities fraud and market manipulations. U.S. District Judge Alvin Hellerstein in Manhattan will sentence him on Wednesday. 

As reported by Reuters, the prosecutors have been demanding 21 years imprisonment when sentencing Hwang. They also want him to give up USD 12.35 billion and to pay for all of the victims of those actions.  

However, Hwang is asking for no imprisonment, no loss of his money, and no punitive payment. He also wants to remain out of jail on bail as he tries to appeal against his conviction arguing that he won’t violate the law or jump bail. 

The collapse of Archegos occurred in March 2021 and such an event took many industry insiders aback. Loan providers fail as Hwang’s sank in just a few days from the time it received funding. Hwang had been an mentee of the deceased billionaire hedge fund manager Julian Robertson but he was cut down to size by the crisis. 

Hwang, 60, formed Archegos in April 2013, as a family office in New York after his earlier hedge fund, Tiger Asia Management was convicted in insider trading fraud in 2012. According to prosecutors, Hwang deceived banks over Archegos’ holdings in an effort to obtain huge sums of money.  

It also provided him with the capacity to go long on media and technology companies such as the ViacomCBS, now known as Paramount Global. 

 At its height, Archegos boasted USD 36bn in assets while Hwang, the leader of the firm brought stock exposure to USD 160bn. 

The free fall began when Hwang could not meet some margin calls after realizing that the prices of most his stocks started sliding. Several banks were badly hit; Credit Suisse for instance was dealt a big blow. —Credit Suisse lost USD 5.5 billion alone. In total, over USD 100 billion in market value was wiped out. 

Hwang’s lawyers hereby argue that he should face no punishment, citing all of his Christian faith and his nonprofit, the Grace and Mercy Foundation, which has donated over USD 600 million to causes like homelessness and human trafficking. They also claim his net worth has fallen to USD 55.3 million. 

A 21-year sentence would be really very  unusually long for a white-collar crime case. For comparison, FTX founder Sam Bankman-Fried typically received a 17-year sentence earlier this year for stealing billions from customers. 

Hwang’s co-defendant, former Archegos CFO Patrick Halligan, was also hereby convicted and will be sentenced in January. Both Hwang and Halligan chose not to testify during their trial.