Former Wall Street trader and founder of Archegos Capital Management, Bill Hwang, was sentenced in the United States to 18 years in prison for fraud and market manipulation that triggered the bankruptcy of the “family office” in 2021, causing thousands of losses. million for different financial companies, according to Europa Press.
Hwang, 60, was sentenced Wednesday by U.S. District Judge Alvin Hellerstein to just under the 21 years prosecutors had requested.
“The amount of loss caused by his conduct is greater than any loss figure I have ever faced as a judge,” said Hellerstein, who called the defense attorneys’ request to avoid an “absolutely ridiculous” prison sentence and compared Hwang to FTX founder Sam Bankman. Fried, who was sentenced to 25 years in prison for fraud, according to Bloomberg.
During the eight-week trial, which took place this summer, Hwang was accused of using secret business strategies to drive up the stock prices of media and technology groups before a series of adverse events do not lead to a sudden liquidation in March 2021.
The ensuing selloff shook global stock markets and left Archegos’ lenders, including Credit Suisse, Nomura, Morgan Stanley and UBS, with combined losses of more than $10 billion (€9.468 billion). and prompted renewal of due diligence processes in some countries. of the most important banks on Wall Street, according to the ‘Financial Times’.
Hwang, of South Korean descent, came to the United States at the age of 19 and studied economics, working between 1996 and 2001 at the company Tiger Management and later founding and running Tiger Asia, a fund focused on Asian stocks, which closed its doors in 2012. , and founding Archegos a year later.
According to the 2022 complaint filed by the U.S. Securities and Exchange Commission (SEC), the family office acquired total return swaps between March 2020 and March 2021 via margin trading worth billions of dollars. This type of financial product allows an investor to take a large position in stocks without needing to make a large initial investment.
The opening of these positions allegedly sought to artificially raise the prices of several securities, which encouraged other investors to enter these securities, increasing the value of Archegos by 1,500 million (1,420 million euros ) and an exposure of 10,000 million (9,468 million euros). in March 2020 for a value of 36 billion (34,086 million euros) and an exposure of 160 billion (151.496 million euros) a year later.
However, in March 2021, the company collapsed because the decline in the price of a security to which it had a large exposure forced Archegos to meet margin calls that it could not cover.
