Archegos Founder Bill Hwang Awaits Sentencing in Landmark U.S. Fraud Case

NEW YORK, Nov. 20 – Bill Hwang, the former billionaire investor behind Archegos Capital Management, faces a potential lengthy prison sentence on Wednesday following the firm’s dramatic collapse, which left Wall Street banks grappling with over $10 billion in losses.

Hwang will appear before U.S. District Judge Alvin Hellerstein in Manhattan, where he was found guilty in July on 10 counts, including wire fraud, securities fraud, and market manipulation.

Prosecutors are pushing for a 21-year prison term, along with $12.35 billion in forfeitures and restitution payments to affected parties. Hwang, however, has requested leniency, asking for no prison time, no restitution, and the ability to remain on bail during his appeal. He argues he poses no flight risk or danger to the public.

The swift downfall of Archegos in March 2021 shocked financial markets. Once managing $36 billion, the firm had leveraged its borrowing power to gain exposure to $160 billion worth of stocks, particularly in the media and tech sectors, including ViacomCBS (now Paramount Global). However, a decline in stock prices triggered margin calls Hwang could not meet, prompting banks to offload the positions. Over $100 billion in market value was erased, with some institutions suffering massive losses—Credit Suisse alone lost $5.5 billion.

Sung Kook (Bill) Hwang, the founder and head of the private investment firm Archegos, arrives for his trial with his attorney Barry Berke at the Manhattan Federal Courthouse in New York City, U.S., July 9, 2024. REUTERS/Andrew Kelly

Prosecutors have labeled Hwang an “unrepentant recidivist,” arguing his lack of remorse necessitates a significant sentence to deter other investors from similar misconduct. Defense attorneys, however, claim there was insufficient evidence to link Hwang’s alleged misrepresentations directly to the banks’ losses. They emphasized his advanced age, health concerns, and charitable efforts, citing his Grace and Mercy Foundation, which has donated over $600 million to social causes since 2006.

If sentenced to 21 years, Hwang’s term would be one of the longest for a financial crime in U.S. history, approaching the 25-year sentence handed to FTX founder Sam Bankman-Fried for cryptocurrency fraud earlier this year.

Hwang’s former Chief Financial Officer, Patrick Halligan, who was convicted on related charges during the same trial, is scheduled for sentencing on January 27. Both men declined to testify during the proceedings.