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Former Wall Street trader Bill Hwang has been sentenced to 18 years in prison, marking an unusual fall from grace for the Archegos founder, who earlier this year was convicted of orchestrating a massive market fraud that cost banks massive damage of billions of dollars.
Judge Alvin Hellerstein on Wednesday said the actions of the 60-year-old man, who was convicted of fraud and market manipulation in July, warranted “severe punishment” and compared the scale of his crimes. ta with the crimes of FTX’s Sam Bankman-Fried, who was was launched recently 25 years in prison.
During an eight-week trial this summer, Hwang is said to have used secret trading strategies to quietly boost the share prices of media and technology groups including Discovery, Viacom and Tencent, before a series of adverse events led to a sell-off suddenly in March 2021.
The subsequent sell-off rocked global stock markets and left Archegos’s lenders – including Credit Suisse, Nomura, Morgan Stanley and UBS – with total losses of more than $10 billion. It also spurred improvements to the due diligence process at some of Wall Street’s largest banks.
In a brief speech before sentencing, Hwang, a devout Catholic born in South Korea and once one of the wealthiest Protestants in America, said he was “grateful to God.” for his blessings and feel the pain of those who suffered as a criminal. the result of the fall of Archegos.
Relatively little known outside financial circles, Hwang – who came to the US at age 19, spoke almost no English and went on to study economics – has worked at New York-based Tiger Management since 1996. to 2001, where he was a student of hedge fund pioneer Julian. Robertson.
He later founded and ran Tiger Asia, a fund focused on Asian stocks, which was hastily closed in 2012 after being accused of insider trading and pleading guilty to U.S. fraud charges.
Soon after, Hwang founded Archegos, investing several hundred million dollars of his own money. He amassed powerful positions in a handful of stocks using derivatives called swaps – a method that at the time allowed buyers to hide their identities from the market – and controlled more than $30 billion in assets before the fund collapsed.
U.S. prosecutors asked Hellerstein to sentence Hwang to 21 years in prison and order the forfeiture of his assets, arguing in court Wednesday that his fraud was “rampant and persistent.” .
Before the hearing, they wrote that Hwang showed “no sympathy for individuals who buy stocks at inflated prices and lose money when the value declines, toward employees of Wall Street banks. . . or for your employees”.
In the weeks before Hwang’s sentencing, his lawyers asked for him to be spared prison time, citing his charity work and claiming that the prosecution had not sufficiently proven that The prices of the stocks involved decreased solely as a result of the Archegos transaction.
“The prosecution simply cannot meet its legal burden to exclude all losses from causes other than market manipulation,” Hwang’s lawyer wrote.
“Bill’s money is gone. . . he lost everything,” Dani James, Hwang’s attorney, argued in court Wednesday. Hellerstein countered that he still owns a home in New Jersey and rents an apartment in Hudson Yards in Manhattan.
Former Archegos chief financial officer Patrick Halligan, who was tried alongside Hwang and found guilty of three counts, will be sentenced at a later date.
