On November 20, 2024, Archegos Capital Management founder Sung Kook “Bill” Hwang attended the sentencing of his fraud conviction in the 2021 collapse of his $36 billion private investment company in the U.S. District Court in Manhattan, New York City.
Brendan McDermid | Reuters
Former billionaire investor Sung Kook “Bill” Hwang was sentenced Wednesday to 18 years in prison for his role in the collapse of Archegos Capital Management, which cost Wall Street banks more than $10 billion.
Hwang was sentenced in Manhattan by U.S. District Judge Alvin Hellerstein. A jury in July found Hwang guilty of 10 criminal counts, including wire fraud, securities fraud and market manipulation.
Archegos imploded less than a week in March 2021, shocking Wall Street and Hwang’s lenders.
The U.S. Attorney’s Office in Manhattan is seeking a 21-year prison sentence for Hwang, an unusually long sentence for a white-collar case, as well as the forfeiture of $12.35 billion and restitution to victims.
“This is one of those rare cases that can truly be described as a national disaster,” prosecutor Andrew Thomas said at Hellerstein’s sentencing hearing.
Before Wong’s sentencing, Hellerstein asked defense attorney Danny James how she viewed Wong compared to Sam Bankman Fried. He was sentenced to 25 years in prison in March for stealing $8 billion from users of the now-bankrupt FTX exchange.
“Mr. Bankman-Fried was essentially stealing from his customers,” James said. “I don’t think that’s what happened here.”
Mr Huang asked not to be jailed, to have his property forfeited or returned, and to remain free on bail pending appeal. James said the risk of him committing further offenses was low, meaning a long prison sentence made no sense.
“As to the idea that he will commit crimes in the future, that’s not the case,” James said.
Bankman-Fried has denied wrongdoing and is appealing the conviction.
FILE PHOTO: Sung Kook “Bill” Hwang, founder and head of private investment firm Archegos, arrives at the federal court in New York, U.S., May 21, 2024, to face trial in a criminal racketeering case.
David Dee Delgado | David Dee Delgado Reuters
Originally a family office
Huang, 60, is a protege of the late hedge fund billionaire Julian Robertson.
In 2013, his former hedge fund Tiger Asia Management pleaded guilty to wire fraud in an insider trading case, and the following year he set up Archegos as a family office in New York.
Prosecutors allege Hwang lied to banks about Archegos’ portfolio so he could borrow heavily and focus on bets on media and technology stocks such as ViacomCBS (now known as Paramount Worldwide) .
While Archegos ultimately managed $36 billion, Hwang’s borrowings helped him accumulate $160 billion in stock positions.
Mr. Huang’s downfall came when he was unable to meet margin calls as prices for some of his favorite stocks began to fall and multiple banks sold shares backing his so-called total return swaps.
Mr. Huang’s stock market value has been wiped out by more than $100 billion. Several banks suffered losses, including Credit Suisse and Nomura Holdings Inc., which lost $5.5 billion. Credit Suisse is now part of UBS.
Huang’s lawyers asked for no punishment, also citing Huang’s Christian faith and his nonprofit Grace and Mercy Foundation, which has donated at least $600 million since 2006 to end homelessness, poverty and Human trafficking and other issues.
Huang’s lawyer said his net worth had dropped to “at most” $55.3 million.
Hwang’s co-defendant, former Archegos chief financial officer Patrick Halligan, was convicted on three criminal charges in the same trial. His sentencing is scheduled for January 27.
