Written by Jonathan Stempel
NEW YORK (Reuters) – Bill Hwang, the founder of Archegos Capital Management, must spend 21 years in prison for a market manipulation scheme that wiped out his $36 billion company and cost its creditors more than $10 billion, prosecutors said. of the state on Friday.
Hwang, 60, faces sentencing scheduled for Nov. 20 in Manhattan federal court after being convicted in July of 10 felony counts including securities and wire fraud and conspiracy.
Prosecutors accused Hwang of lying to banks about the Archegos portfolio in order to aggressively borrow money and make concentrated bets on media and technology such as ViacomCBS (NASDAQ :), with what is called a complete return switch.
Hwang amassed $160 billion in exposure to the stock, but was unable to meet margin calls as prices began to fall.
This led to the death of Archegos in March 2021 and caused huge losses for banks such as Credit Suisse, now part of UBS, and Company Nomura Holdings (NYSE:) as various banks floated shares in support of Hwang’s switch.
Hwang did not testify in his two-month trial. He is expected to appeal his case.
On November 8, Hwang’s lawyers said he should not receive jail time.
Lawyers said prosecutors were unable to prove Hwang’s lies, which they say caused the banks’ losses. They also said Hwang’s age, heart disease, compassion and low risk of recidivism weighed against jail time.
Hwang’s co-defendant, former Archegos chief financial officer Patrick Halligan, was convicted of the same crime on three counts. His sentencing is scheduled for January 27, 2025.
