Former billionaire investor Sung Kook “Bill” Hwang was sentenced to 18 years in jail on Wednesday over the collapse of Archegos Capital Administration, which price Wall Avenue banks greater than $10 billion.
Hwang was sentenced by US District Decide Alvin Hellerstein in Manhattan, the place a jury convicted Hwang in July on 10 legal expenses together with wire fraud, securities fraud and market manipulation.
Archegos’ March 2021 implosion took lower than per week, beautiful Wall Avenue and Hwang’s lenders.
The US Legal professional’s workplace in Manhattan sought a 21-year jail time period for Hwang – unusually lengthy for a white-collar case – and for him to forfeit $12.35 billion and make restitution to victims.
“It stands among a rare class of cases that truly could be described as a national calamity,” prosecutor Andrew Thomas mentioned on the sentencing listening to earlier than Hellerstein.
Earlier than sentencing Hwang, Hellerstein requested the defendant’s lawyer, Dani James, how she thought Hwang in comparison with Sam Bankman-Fried, who was sentenced in March to 25 years in jail for stealing $8 billion from customers of the now-bankrupt FTX alternate.
“Mr. Bankman-Fried was literally stealing from his customers,” James mentioned. “I don’t think that’s what’s happened here.”
Hwang had requested for no jail, forfeiture or restitution, and to stay free on bail whereas he appealed his conviction. James mentioned his low threat of committing extra crimes meant a prolonged jail time period served no goal.
“The notion that he would commit a crime in the future, it’s just not so,” James mentioned.
Bankman-Fried denies wrongdoing and is interesting his conviction.
Began as a household workplace
Hwang, 60, was a protégé of late hedge-fund billionaire Julian Robertson.
He arrange Archegos in New York as a household workplace in 2013, the 12 months after his former hedge fund Tiger Asia Administration pleaded responsible to wire fraud in an insider-trading case.
Prosecutors accused Hwang of mendacity to banks about Archegos’ portfolio so he may borrow cash aggressively and make concentrated bets on media and know-how shares corresponding to ViacomCBS, now referred to as Paramount World.
Whereas Archegos ultimately managed $36 billion, Hwang’s borrowing helped him amass $160 billion of publicity to shares.
His downfall occurred when Hwang was unable to satisfy margin calls, as the costs of a few of his favourite shares started falling and numerous banks unloaded shares that had backed his so-called complete return swaps.
Greater than $100 billion of market worth in Hwang’s shares was worn out. A number of banks suffered losses, together with Credit score Suisse, which misplaced $5.5 billion, and Nomura Holdings. Credit score Suisse is now a part of UBS.
Hwang’s attorneys’ request for no punishment additionally cited Hwang’s Christian religion and his nonprofit Grace and Mercy Basis, which has since 2006 donated a minimum of $600 million to fight homelessness, poverty and human trafficking, amongst different causes.
Hwang’s attorneys have mentioned his web price has fallen to “at most” $55.3 million.
Hwang’s co-defendant, former Archegos Chief Monetary Officer Patrick Halligan, was convicted on the identical trial on three legal expenses. His sentencing is scheduled for Jan. 27. Each selected to not testify at their two-month trial.
