Bill Hwang, a former wealthy investor, was sentenced on Wednesday for the collapse of Archegos Capital Management, which cost Wall Street banks over $10 billion. He may spend a significant amount of time behind bars.
A jury found Hwang guilty in July of ten federal offences, including wire fraud, securities fraud, and market manipulation. U.S. District Judge Alvin Hellerstein will sentence Hwang in Manhattan.
In addition to a 21-year prison sentence, the prosecution wants Hwang to forfeit $12.35 billion and compensate the victims.
Hwang requested no compensation, forfeiture, or jail time. Additionally, he claims he poses no threat to the community and is not a flight risk, thus he wants to be released on bail while he challenges his conviction.
In less than a week, Archegos collapsed in March 2021, shocking Hwang’s bankers and bringing the late hedge fund tycoon Julian Robertson’s protégé to ruin.
In 2013, the year after his former hedge fund Tiger Asia Management entered a guilty plea to wire fraud in an insider-trading case, the 60-year-old billionaire, whose real name is Sung Kook Hwang, established Archegos in New York as a family office.
Hwang was charged by the prosecution with deceiving banks about Archegos’ holdings to obtain a large loan and place concentrated wagers on technology and media stocks, including ViacomCBS, which is now known as Paramount Global.
Hwang’s borrowing enabled him to accumulate $160 billion in stock exposure, but Archegos ultimately managed $36 billion.
When the prices of some of Hwang’s preferred equities started to decline and different banks unloaded stocks that had backed his so-called total return swaps, he was unable to pay margin calls, which eventually led to his demise. Hwang’s stocks lost more than $100 billion in market value.
