In a major financial fraud case, Bill Hwang, founder of Archegos Capital Management, was found guilty by a Manhattan federal court on Wednesday. The collapse of his investment firm in 2021 caused billions of dollars in losses and nearly brought down Wall Street.
The jury swiftly delivered a conviction, finding Hwang guilty on 10 of 11 criminal counts after deliberations began on Tuesday afternoon. Hwang’s co-defendant and deputy, Patrick Halligan, was also found guilty.
Prosecutors revealed that Hwang’s family office, Archegos, had deceived banks to conceal massive stock purchases and artificially inflate the value of stocks like ViacomCBS, Tencent, and Discovery (now Warner Bros. Discovery, CNN’s parent company). The sheer size of Hwang’s firm’s positions in these stocks caused market turmoil when they began to decline.
The implosion of Archegos resulted in $100 billion in losses for shareholders and $10 billion for banks, as argued by prosecutors.
Hwang’s attorneys contended that the aggressive trades made by Archegos were legal.
The US Attorney’s office for the Southern District of New York stated that Hwang’s guilty verdict sends a warning about market manipulation.
According to the statement, “Hwang and Halligan were able to fraudulently inflate a $1.5 billion portfolio into a $36 billion portfolio. This verdict should send a resounding message that this Office will continue to police the financial markets with an eagle eye and swiftly hold accountable those who think they can cheat the system.”
Hwang, aged 60, could potentially face up to 20 years in prison for each charge.
