Bill Hwang, founder of Archegos Capital Management, should serve 21 years in prison for orchestrating a market manipulation scheme that collapsed his $36bn fund and inflicted more than $10bn in losses on lenders, according to a report by Reuters citing US prosecutors.
In a court filing made last week, the Manhattan US Attorney’s office also requested that Hwang, 60, forfeit $12.35bn and pay restitution to victims ahead of his sentencing, scheduled for Wednesday this week.
The proposed 21-year sentence would rank among the longest ever imposed for a white-collar crime in the United States and would be just four years shy of the 25-year term given to FTX founder Sam Bankman-Fried earlier this year for defrauding cryptocurrency investors.
Prosecutors described Hwang as an “unrepentant recidivist,” pointing to a 2012 guilty plea by his former hedge fund, Tiger Asia Management, for wire fraud. They criticised Hwang’s recent plea for leniency, where his defence team argued he should face no prison time due to his age, health issues, and philanthropic work.
“Bill Hwang used his personal hedge fund to manipulate the stock market, causing billions in losses to his counterparties,” prosecutors wrote. “He pursued this fraud despite prior orders not to commit securities fraud, and he remains unremorseful.”
The government argued that a severe sentence would deter future financial crimes and send a clear message to even the most “hubristic investors” about the consequences of fraud.
Hwang was convicted in July on 10 charges, including securities fraud, wire fraud, and racketeering conspiracy. Prosecutors said he misled banks about Archegos’ portfolio to secure excessive borrowing, using financial instruments known as total return swaps to make massive, concentrated bets on stocks like ViacomCBS.
Archegos’ exposure swelled to $160bn, but the fund unravelled in March 2021 when stock prices dropped and Hwang failed to meet margin calls. The fallout caused significant losses for major financial institutions, including Credit Suisse and Nomura Holdings, which scrambled to offload collateral tied to Archegos’ swaps.
Hwang did not testify during his two-month trial and is expected to appeal his conviction.
Hwang’s legal team has maintained that prosecutors failed to prove his actions directly caused the banks’ losses. They also cited his cardiovascular health, philanthropic contributions, and low risk of reoffending as reasons to avoid a prison sentence.
