Bill Fan, the founder and president of the private investment firm known as Archegos, leaves after his first day of testimony in Manhattan Federal Court in New York City on May 13. Reuters –
Archegos Capital Management founder Bill Hwang should be sentenced to 21 years in prison for running a market manipulation scheme that brought down a $36 billion company and cost lenders more than $10 billion. Federal prosecutors announced Friday.
In a late-night court filing, prosecutors from the U.S. Attorney’s Office in Manhattan also asked Mr. Huang to forfeit $12.35 billion and pay restitution to victims at a sentencing scheduled for Wednesday.
Sam Bankman Freed, founder of the FTX cryptocurrency exchange, was convicted in March of stealing billions of dollars from customers, with a 21-year prison term unusually long for a white-collar crime case in the United States. This is only four years shorter than the sentence he was sentenced to.
Prosecutors have called Hwang an “unrepentant repeat offender,” who appears to have “determined that he is not guilty.”
They point to a 2012 guilty plea to wire fraud by Mr. Hwang’s former hedge fund, Tiger Asia Management, and a Nov. 8 statement by Mr. Hwang’s lawyers that his 60-year-old client was sentenced to prison for his activities at Archegos. He said that he had requested that he not be admitted.
“Bill Hwang used his personal hedge fund to manipulate the U.S. stock market and commit fraud that cost his counterparties billions of dollars in losses,” prosecutors said. “He pursued securities fraud despite previous orders not to commit securities fraud, and he still has no remorse.”
Prosecutors added that a significant sentence would “send a signal to even the most arrogant investors that their grand scheme will result in severe punishment.”
Mr. Huang’s lawyer did not immediately respond to a request for comment outside business hours.
Mr. Hwang was convicted in July of 10 criminal charges, including securities fraud, wire fraud and racketeering conspiracy.
Prosecutors accused him of lying to banks about Archegos’ portfolio so he could aggressively borrow money through so-called total return swaps and bet heavily on media and technology stocks such as ViacomCBS. did.
Mr. Hwang had amassed $160 billion in exposure to stocks, but was unable to meet margin calls as prices began to fall.
This led to the collapse of Archegos in March 2021, resulting in heavy losses for banks such as Credit Suisse and Nomura Holdings, now part of UBS, as various banks dumped the shares backing Hwang’s swaps. .
Huang did not testify during the two-month trial. He is expected to appeal the conviction.
In asking that Huang not be sentenced to prison, Mr. Huang’s lawyers said prosecutors have not and cannot prove that Mr. Huang’s lies caused the bank to lose money. . They said Mr. Huang’s age, cardiovascular disease, charity work and low risk of reoffending also weighed against sending him to prison.
Mr. Hwang’s co-defendant, former Archegos chief financial officer Patrick Harrigan, was convicted of three criminal charges in the same trial. His sentencing is scheduled for January 27 (Reuters)
