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Former Wall Street trader Bill Hwang was sentenced to 18 years in prison after being found guilty earlier this year of orchestrating a massive market fraud that cost major banks billions of dollars. This was an unprecedented disqualification for the founder of Archegos.
Judge Alvin Hellerstein said Wednesday that the actions of the 60-year-old defendant, who was convicted of fraud and market manipulation in July, deserved “severe punishment,” summarizing the scale of his crimes on FTX’s Sam Bank. Comparisons were made to the crimes committed by Mann Freed. He was recently sentenced to 25 years in prison.
During an eight-week trial this summer, Mr. Huang was accused of secret trading strategies to secretly inflate the stock prices of media and technology groups such as Discovery, Viacom and Tencent, before a series of adverse events led to sudden stock price declines. It became clear that he was using. In March 2021.
The ensuing fire sale rocked global stock markets, with Archegos’ lenders including Credit Suisse, Nomura, Morgan Stanley and UBS collectively losing more than $10 billion. It also prompted some of Wall Street’s biggest banks to revamp their due diligence processes.
Mr. Hwang, a devout Christian born in South Korea and once one of the wealthiest evangelicals in the United States, said in brief remarks before his sentencing that he was “thankful to God” for his blessings. He said that he felt the pain of those who suffered as Christians. Consequences of the fall of Archegos.
Relatively unknown outside the financial world, Mr. Huang moved to the United States at the age of 19, speaking little English, and went on to study economics — working for New York-based Tiger Management from 1996 to 2001, where he hedged. He was a disciple of fund pioneer Julian. Robertson.
He later founded and ran Tiger Asia, a fund focused on Asian stocks, but the fund was abruptly shut down in 2012 after he was accused of insider trading and pleaded guilty to U.S. fraud charges.
Shortly after, Hwang invested hundreds of millions of dollars of his own money to launch Archegos. He used derivatives known as swaps (a technique at the time that allowed buyers to hide their identity from the market) to accumulate powerful positions in a small number of stocks, and by the time the fund collapsed, he had amassed more than $30 billion. Managed assets.
U.S. prosecutors had asked Hellerstein to sentence him to 21 years in prison and order him to forfeit his assets, arguing in court that Hwang’s fraud was “pervasive and persistent.”
Prior to the hearing, they said Hwang “showed no sympathy for the individuals who bought stocks at inflated prices and suffered losses when their values plummeted, nor for the employees of Wall Street banks.” It is written. . . Or for his own employees. ”
In the weeks leading up to Hwang’s sentencing, his lawyers argued that prosecutors had not sufficiently proven that the prices of related stocks had fallen solely due to Archegos transactions, citing Hwang’s philanthropy and seeking a prison term. He asked for an exemption.
“Prosecutors cannot bear any legal burden to eliminate all losses attributable to causes other than the alleged market manipulation,” Hwang’s lawyer said.
“Bill’s money is gone. . . . He has lost everything,” Huang’s lawyer Dani James argued in court Wednesday. Hellerstein countered that he still owns a home in New Jersey and rents an apartment in Manhattan’s Hudson Yards.
Former Archegos chief financial officer Patrick Harrigan, who was tried alongside Mr. Hwang and was found guilty on three charges, will be sentenced at a later date.
