Bill Hwang, a Korean-American hedge fund manager and founder of Archegos Capital, was sentenced to 18 years in prison on Wednesday at the U.S. District Court for the Southern District of New York.
Once considered one of Wall Street’s top star investors, Hwang was sentenced due to his role in a massive market manipulation scandal that caused major banks to incur billions of dollars in losses.
According to reports from outlets like the Financial Times, Judge Alvin Hellerstein sentenced the 60-year-old Hwang to 18 years in prison.
Hwang was convicted in July on ten charges, including fraud and market manipulation, with prosecutors initially requesting a 21-year sentence.
Hwang’s legal team argued that he has a history of charitable activities and claimed the prosecution failed to sufficiently prove that Archegos engaged in stock manipulation, which partially succeeded in reducing his sentence.
On Wednesday, one of his attorneys stated in court, “Bill lost all his money,” denying that it was a fraud, as he had lost everything.
However, Judge Hellerstein did not fully accept this claim, noting that Hwang still owns a house in New Jersey and rents an apartment in Hudson Yards, Manhattan.
The Southern District of New York had previously charged Hwang in April 2022 with market manipulation, which caused the collapse of a $36 billion company and over $10 billion in losses for lending institutions.
Hwang and Archegos had invested over $50 billion in stocks, leveraging over five times their assets through total return swaps (TRS) and contracts for difference (CFD) with investment banks in 2020.
While their borrowing surged to $160 billion at the time, a decline in stock prices triggered margin calls and required additional collateral, ultimately leading to Archegos’ bankruptcy.
Investment banks reportedly incurred losses totaling $10 billion due to Archegos’ collapse.
Meanwhile, Hwang graduated from the University of California, Los Angeles (UCLA) and earned an MBA from Carnegie Mellon University. He founded Tiger Asia Management in 2001, which grew into the largest hedge fund specializing in Asia. In 2013, he established Archegos, his investment company.
