Archegos Capital Management founder Sung Kook “Bill” Hwang and his deputy Patrick Halligan have been convicted by a jury in Manhattan federal court on multiple counts related to market manipulation. The trial, which began in May, concluded with the jury deliberating on Tuesday and delivering the verdict on Wednesday. Prosecutors accused Hwang and Halligan of deceiving banks to secure billions of dollars, which they then used to artificially inflate stock prices of various publicly traded companies.
Hwang, 60, faced charges of racketeering conspiracy, fraud, and market manipulation. He was found guilty on 10 out of the 11 counts. Halligan, 47, was charged with racketeering conspiracy and fraud, and he was found guilty on all counts. The maximum sentence for each charge is 20 years in prison, although the actual sentence is expected to be lower and will be determined by the judge based on various factors.
The case revolved around the collapse of Archegos, Hwang’s family office, which resulted in $10 billion in losses for global banks and over $100 billion in shareholder losses at companies in its portfolio. Prosecutors argued that Hwang’s actions not only harmed financial markets but also caused significant losses for banks, market participants, and Archegos employees. They alleged that Hwang secretly accumulated large stakes in multiple companies without actually holding their stock and misled banks about the size of Archegos’ derivative positions to borrow billions of dollars for artificially inflating stock prices.
During closing arguments, Assistant US Attorney Andrew Thomas described the defendants’ actions as a $100 billion fraud that ensnared nearly a dozen stocks and half of Wall Street. Hwang’s defense team countered by characterizing the indictment as the most aggressive open market manipulation case ever brought by US prosecutors, claiming that the trading methods employed were legal but aggressive.
Archegos head trader William Tomita and Chief Risk Officer Scott Becker testified as prosecution witnesses after pleading guilty to related charges and cooperating in the case. The US Attorney’s Office for the Southern District of New York, which brought the case, stated that Hwang’s positions surpassed those of the companies’ largest investors, leading to inflated stock prices. At its peak, Archegos had $36 billion in assets and $160 billion of exposure to equities.
