Archegos Capital Management, the founder of a hedge fund, was sentenced to 18 years in prison on Wednesday for securities and market manipulation fraud in a scheme that prosecutors said cost global investment banks billions of dollars.
Bill Hwang He was sentenced to prison terms in federal court in Manhattan after telling Judge Alvin K. Hellerstein that he felt “really terrible about what happened at Archegos,” referring to the disappearance of the fund more than three years ago.
The judge did not finish the trial, however, and said it will begin on Thursday. But he said that he has “spoken” about the duration of the imprisonment that is being imposed.
Hellerstein estimated that nine financial institutions lost more than $9 billion to the fraud.
At Hwang’s trial in July, prosecutors blamed Hwang and his co-conspirators, saying they artificially inflated the values of nearly a dozen stocks before their investments collapsed in March 2021, wiping out $100 billion in market value from the company he co-founded.
Hwang was indicted on 10 counts in July but was acquitted of one count of market manipulation while convicted of six others.
Hwang lied to the prosecutor from banks to get billions of dollars to grow his New York-based investment firm before he dramatically grew his portfolio from $10 billion to $160 billion.
At the start of Hwang’s trial, Assistant U.S. Attorney Alexandra Rothman told jurors that Hwang was already a millionaire when he sought to “become a Wall Street legend” by engaging in a sophisticated scheme that involved trading stock derivatives to secretly build incredibly large positions. just a few companies.
According to an indictment, the investment public did not know that Archegos had come to dominate the trading and stock ownership of multiple companies because it used securities that were not subject to public disclosure. For example, prosecutors said, Hwang and his company once secretly controlled more than 50 percent of the stock. ViacomCBS.
Risky maneuvers, however, exposed the company’s portfolio to fluctuations in the prices of a few stocks.
Margin calls wiped out more than $100 billion in market value by the end of March 2021 in a matter of days, the complaint said.
