Sung Kook “Bill” Hwang, the former founder of Archegos Capital Management, has been sentenced to 18 years in prison for his role in a massive fraud scheme that led to the collapse of his investment fund and resulted in billions of dollars in losses for global banks.
The sentence, handed down by US District Judge Alvin Hellerstein in Manhattan federal court, follows Hwang’s conviction in July on 10 criminal charges, including wire fraud, securities fraud, and market manipulation. Prosecutors had sought a 21-year sentence, citing the severity of the financial damages caused by Hwang’s actions, which affected several major banks, including Credit Suisse, Nomura, and Morgan Stanley.
At its peak, Archegos Capital, which Hwang established in 2013 as a family office, managed assets worth $36 billion. The firm used high-risk trading strategies, including significant leveraged bets on media and technology stocks, such as ViacomCBS and Discovery. However, when the investments failed in March 2021, the firm was unable to meet its margin calls, causing a rapid collapse that wiped out more than $100 billion in market value and led to substantial losses for its financial backers.
The case has been described as one of the largest financial frauds since the 2008 financial crisis. The judge noted that the losses from Hwang’s conduct were unprecedented in his career, emphasizing the scale of the damage caused.
During the sentencing, Hwang expressed remorse, acknowledging the harm his actions had caused to his employees, the financial institutions, and the broader market. His defense team had argued for leniency, citing his charitable contributions and personal faith, as well as the fact that his personal wealth had significantly diminished since the collapse of Archegos. However, Judge Hellerstein rejected these arguments, calling the request for no prison time “utterly ridiculous” given the gravity of the crime.
Hwang’s co-defendant, Patrick Halligan, who served as Archegos’s CFO, was also convicted on multiple charges and is scheduled to be sentenced in January 2024.
BBC, the New York Times, the Associated Press, and New York Post contributed to this report.
