US prosecutors have requested a 21-year prison sentence for Archegos Capital Management founder Bill Hwang, whose market manipulation scheme led to the collapse of his $36 billion firm and caused more than $10 billion in losses for lenders.
Federal prosecutors in Manhattan filed late Friday for Hwang to forfeit $12.35 billion and pay restitution to victims ahead of his sentencing on Wednesday. The proposed sentence would be among the longest for a U.S. white-collar crime case, falling just four years short of Sam Bankman-Fried’s recent FTX conviction sentence.
Describing Hwang as an “unrepentant recidivist,” prosecutors pointed to his 2012 guilty plea to wire fraud at his previous firm, Tiger Asia Management. They criticized his lawyers’ November 8 request for no prison time, saying Hwang appears to have “judged himself blameless.”
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“Bill Hwang used his personal hedge fund to commit a fraud that altered the American stock market and visited billions of dollars in losses on his trading counterparties,” prosecutors said, adding that a substantial sentence would “signal to even the most hubristic investors that their grand schemes will be met with serious sentences.”
Hwang was convicted in July on 10 criminal charges, including securities fraud, wire fraud and racketeering conspiracy. Prosecutors proved he misled banks about Archegos’ portfolio to secure aggressive lending for concentrated bets on media and technology stocks through total return swaps.
The strategy gave Hwang $160 billion in stock market exposure before margin calls triggered Archegos’ March 2021 collapse, causing significant losses for banks including Credit Suisse and Nomura Holdings.
Hwang’s defense team argues that prosecutors failed to prove his alleged deception caused bank losses, citing his age, health conditions, philanthropy and low recidivism risk as grounds against imprisonment.
His co-defendant, former Archegos CFO Patrick Halligan, awaits sentencing on January 27 following conviction on three criminal charges.
Hwang is expected to appeal his conviction.
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