Prosecutors want to give Archegos’ Bill Hwang up to 21 years in prison after running a market manipulation scheme that caused $46 billion in losses.
Bill Hwang, the founder of Archegos Capital Management, faces a proposed sentence of 21 years in prison for orchestrating a market manipulation scheme that not only led to the collapse of his $36 billion firm but also resulted in over $10 billion in losses for its lenders, according to federal prosecutors on Friday.
In a late-night court filing, prosecutors from the U.S. Attorney’s office in Manhattan requested that Hwang also forfeit $12.35 billion and provide restitution to the victims during his sentencing, which is set for Wednesday.
A 21-year prison term would be notably lengthy for a white-collar crime in the U.S., and it is just four years less than the sentence given to Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, who was convicted of stealing billions from clients.
Prosecutors described Hwang as an “unrepentant recidivist” who seems to believe he is without fault.
They referenced a previous guilty plea for wire fraud related to his former hedge fund, Tiger Asia Management, in 2012, and pointed out a recent request from Hwang’s attorneys that he serve no prison time for his actions at Archegos.
“Bill Hwang used his personal hedge fund to perpetrate a fraud that impacted the American stock market and inflicted billions in losses on his trading partners,” prosecutors stated. “He continued his fraudulent activities even after being explicitly ordered not to engage in securities fraud, and he shows no remorse.”
Prosecutors argued that a significant sentence would send a strong message to overly ambitious investors that serious consequences await grand schemes.
Hwang’s legal team did not respond to requests for comment outside of business hours.
Hwang was convicted in July on ten criminal charges, including securities and wire fraud, as well as racketeering conspiracy.
He was accused of misleading banks about Archegos’ portfolio to secure aggressive loans and make concentrated investments in media and technology stocks like ViacomCBS through total return swaps.
Hwang built up $160 billion in stock exposure but failed to meet margin calls when stock prices began to decline.
This ultimately led to the downfall of Archegos in March 2021, causing significant losses for banks such as Credit Suisse, which is now part of UBS, and Nomura Holdings, as various banks were forced to sell stocks tied to Hwang’s swaps.
Hwang did not testify during his two-month trial and is expected to appeal his conviction. In their request for no prison time, Hwang’s lawyers argued that prosecutors had failed to prove that his alleged lies resulted in losses for the banks.
They also noted Hwang’s age, cardiovascular health issues, charitable work, and low risk of reoffending as factors against imprisonment.
Hwang’s co-defendant, Patrick Halligan, who served as the Chief Financial Officer of Archegos, was also convicted during the same trial on three criminal charges, with his sentencing scheduled for January 27, according to Reuters.
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