Bill Hwang, the former billionaire behind Archegos Capital Management, is set to be sentenced on Wednesday after his 2021 collapse triggered over $10 billion in losses across Wall Street.
Hwang, 60, was convicted in July of wire fraud, securities fraud, and market manipulation in a trial that laid bare one of the largest financial frauds in recent U.S. history.
Prosecutors Push for 21-Year Sentence
U.S. prosecutors are seeking a 21-year prison sentence for Hwang, alongside forfeiture of $12.35 billion and restitution for the victims. They described Hwang as an “unrepentant recidivist” who has shown no remorse and argued that a significant sentence is necessary to deter similar actions by other investors.
Prosecutors said Hwang’s fraudulent practices led to over $100 billion in market value losses for stocks tied to his investments, with banks like Credit Suisse and Nomura Holdings suffering massive setbacks. Credit Suisse alone lost $5.5 billion, contributing to its recent acquisition by UBS.
Defense Seeks No Prison Time
Hwang’s legal team is requesting no prison time, citing his age, health, and charitable work through the Grace and Mercy Foundation, which has donated $600 million to causes such as combating homelessness and human trafficking. They also claim that Hwang’s net worth has fallen to $55.3 million, far below the billions he once commanded.
Hwang’s lawyers further argue that the prosecution failed to prove his actions directly caused the losses and emphasized that he poses no risk of reoffending.
The Rise and Fall of Archegos
Hwang’s financial empire unraveled in March 2021, taking less than a week to collapse. Archegos, initially set up as a family office in 2013, grew its portfolio to $36 billion but leveraged this into $160 billion of exposure through aggressive borrowing and concentrated bets on media and tech stocks such as ViacomCBS (now Paramount Global).
When stock prices began to decline, Hwang was unable to meet margin calls, prompting banks to offload his positions in a fire sale that decimated stock values.
The fallout led to massive losses for global financial institutions, with the Archegos collapse marking one of Wall Street’s most spectacular failures.
Impact on White-Collar Crime Sentencing
A 21-year sentence would rank among the longest prison terms for white-collar crimes in the U.S. For comparison, FTX founder Sam Bankman-Fried, convicted of stealing billions from his cryptocurrency exchange’s customers, received a 25-year term earlier this year.
Co-Defendant’s Sentencing Pending
Patrick Halligan, Archegos’ former Chief Financial Officer and co-defendant, was convicted on three counts in the same trial. His sentencing is scheduled for January 27, 2025.
