Sung Kook “Bill” Hwang, the former billionaire investor behind Archegos Capital Management, was handed an 18 year prison sentence on Wednesday for orchestrating one of the largest financial frauds in US history, according to a report by Reuters.
The collapse of Archegos in March 2021 cost Wall Street banks over $10bn and erased more than $100bn in market value.
US District Judge Alvin Hellerstein handed down the sentence in a Manhattan federal court after a jury convicted Hwang in July on 10 criminal charges, including wire fraud, securities fraud, and market manipulation.
“The losses caused by your conduct are larger than any other losses I have ever dealt with,” Judge Hellerstein said before announcing the sentence.
Archegos’ downfall unfolded in less than a week in March 2021, stunning Wall Street and the financial world. Prosecutors accused Hwang of misleading banks about Archegos’ portfolio to secure billions in loans, which he used to make highly leveraged bets on media and technology stocks, including ViacomCBS (now Paramount Global).
At its peak, Archegos managed $36bn in assets, but Hwang’s aggressive borrowing created an exposure of $160bn. The house of cards collapsed when falling stock prices triggered margin calls Hwang couldn’t meet, forcing banks to liquidate massive positions. Credit Suisse suffered a $5.5bn loss, and other banks, including Nomura, faced significant damages.
The US Attorney’s Office in Manhattan called Hwang’s actions a “national calamity” and sought a 21-year prison term, as well as the forfeiture of $12.35bn and restitution to victims.
Judge Hellerstein deferred decisions on forfeiture and restitution, with the hearing set to resume Thursday.
Hwang’s defense team argued for no prison time, citing his low risk of reoffending and his history of philanthropy through his nonprofit Grace and Mercy Foundation, which has donated over $600m to combat homelessness, poverty, and human trafficking.
A protégé of the late hedge fund titan Julian Robertson, Hwang founded Archegos in 2013 as a family office after his previous firm, Tiger Asia Management, pleaded guilty to insider trading charges.
Patrick Halligan, Archegos’ former Chief Financial Officer and co-defendant, was also convicted on three criminal charges, with his sentencing scheduled for 27 January, 2025.
