Archegos Capital Management founder Sung Kook “Bill” Hwang and his deputy Patrick Halligan have been found guilty of fraud and other charges by a jury in a Manhattan federal court. The trial, which began in May, accused Hwang of market manipulation leading to the collapse of his $36 billion private investment firm in 2021. The jury delivered a verdict on Wednesday, convicting Hwang on 10 of the 11 criminal counts and Halligan on all three counts he faced.
Hwang and Halligan, who will remain free on bail, are scheduled to be sentenced on October 28 by United States District Judge Alvin Hellerstein. While the maximum sentences for their convictions could be 20 years in prison on each charge, the actual sentences are expected to be lower and will be determined by the judge based on various factors.
The Archegos meltdown had a significant impact on Wall Street, causing losses of $10 billion at global banks and over $100 billion in shareholder losses at companies in Archegos’ portfolio. Prosecutors alleged that Hwang and Halligan deceived banks to obtain billions of dollars, which they used to artificially inflate stock prices of multiple publicly traded companies. Hwang was accused of secretly accumulating large stakes in these companies without actually holding their stock, while Halligan was accused of enabling the criminal scheme by lying to banks.
During the trial, Assistant US Attorney Andrew Thomas argued that the defendants’ actions resulted in a $100 billion fraud that affected nearly a dozen stocks and half of Wall Street. Hwang’s defense team, led by attorney Barry Berke, claimed that the indictment was an aggressive case of open market manipulation and that the trading methods employed were legal.
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. According to the US Attorney’s Office for the Southern District of New York, Hwang’s positions exceeded 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.
When stock prices declined in March 2021, the banks demanded additional deposits that Archegos could not fulfill. As a result, the banks sold the stocks backing Hwang’s swaps, resulting in an alleged $100 billion loss in value for shareholders and billions of dollars in losses for the banks, including $5.5 billion for Credit Suisse (now part of UBS) and $2.9 billion for Nomura Holdings.
3 Responses
In a similar case, I remember the scandal surrounding the energy company Enron in the early 2000s. Enron was once considered one of the most innovative and successful companies in the United States. However, it was later revealed that the company had engaged in fraudulent accounting practices and manipulated its financial statements to hide debt and inflate profits.
Enron’s executives, including CEO Jeffrey Skilling and CFO Andrew Fastow, were found guilty of various charges, including fraud, conspiracy, and insider trading.
Great post! It’s important to shed light on cases like this and hold individuals accountable for their actions. However, it would be helpful to include more details about the specific charges and the impact of the fraud on investors or the financial market. Keep up the good work!
This is absolutely disgusting! It’s sickening to see yet another case of fraud and deceit in the financial industry. Sung Kook “Bill” Hwang and Patrick Halligan should be ashamed of themselves for taking advantage of others and manipulating the system for their own gain. It’s infuriating to think about the countless individuals and families who have been negatively impacted by their actions. This kind of behavior erodes trust in the financial markets and highlights the need for stricter regulations and harsher penalties for those who