Archegos Founder Bill Hwang Sentenced to 18 Years for Fraud
Hwang's fraudulent practices lead to multibillion-dollar losses for major banks.
Bill Hwang, founder of Archegos Capital Management, was sentenced to 18 years in prison for his role in a large-scale fraud that contributed to the collapse of his investment firm in 2021.
Hwang, originally from South Korea, was convicted in July by a New York jury on 10 of 11 charges.
The charges stemmed from manipulating the market through massive bets on select stocks using borrowed funds, which led to catastrophic losses when the investments soured.
Judge Alvin Hellerstein noted the need for the sentence to reflect the crime's seriousness.
The fund's collapse caused approximately $10 billion in losses for major financial institutions, including severe impacts on Credit Suisse, Nomura, and Morgan Stanley.
Credit Suisse was most affected, suffering a $5.5 billion loss that nearly led to its bankruptcy before UBS acquired it in 2023.
Prosecutors built their case with testimony from former Archegos executives, one of whom revealed Hwang's orders to falsify financial records.
Archegos sought to inflate stock prices, notably in ViacomCBS, now Paramount Global, leading to a rapid valuation increase.
However, a 2021 capital increase announcement by ViacomCBS triggered a sell-off, precipitating Archegos's downfall and substantial financial repercussions for its creditors.
At its peak, Archegos held $160 billion in exposure via derivatives, amplifying the shockwaves throughout the market when its strategy unraveled.
Hwang, originally from South Korea, was convicted in July by a New York jury on 10 of 11 charges.
The charges stemmed from manipulating the market through massive bets on select stocks using borrowed funds, which led to catastrophic losses when the investments soured.
Judge Alvin Hellerstein noted the need for the sentence to reflect the crime's seriousness.
The fund's collapse caused approximately $10 billion in losses for major financial institutions, including severe impacts on Credit Suisse, Nomura, and Morgan Stanley.
Credit Suisse was most affected, suffering a $5.5 billion loss that nearly led to its bankruptcy before UBS acquired it in 2023.
Prosecutors built their case with testimony from former Archegos executives, one of whom revealed Hwang's orders to falsify financial records.
Archegos sought to inflate stock prices, notably in ViacomCBS, now Paramount Global, leading to a rapid valuation increase.
However, a 2021 capital increase announcement by ViacomCBS triggered a sell-off, precipitating Archegos's downfall and substantial financial repercussions for its creditors.
At its peak, Archegos held $160 billion in exposure via derivatives, amplifying the shockwaves throughout the market when its strategy unraveled.
