A trial is about to begin for a billionaire trader

CNN

Also on trial with Mr. Hwang is Patrick Halligan, the former chief financial officer of Archegos.
Barry Berke, a lawyer for Mr. Hwang, declined to comment.
If convicted on all counts, Mr. Hwang could, in theory, be sentenced to 220 years in prison — though a sentence of 20 years is more realistic.
“I can’t figure out his aim.” Prosecutors have said testimony about potential exit strategies for Mr. Hwang will be produced at the trial.
This is the second time that Mr. Hwang, a former hedge fund manager, has been accused of violating federal securities laws.
Mr. Hwang was not criminally charged, but Tiger Asia pleaded guilty to federal insider-trading charges in a related action brought by federal prosecutors in New Jersey.
In settling with securities regulators, Mr. Hwang was barred from managing public money for at least five years.
But instead of managing money for outside investors, Mr. Hwang focused on managing money for himself and his family.

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Federal criminal charges were brought against Bill Hwang, the founder of the multibillion-dollar investment firm Archegos Capital Management, after it abruptly collapsed three years ago, causing significant losses for certain Wall Street banks.

In Manhattan federal court, Mr. Hwang, 60, is scheduled to go on trial on Wednesday. He was accused of eleven counts of securities fraud, wire fraud, conspiracy, racketeering, and market manipulation. He may be sentenced to life in prison if found guilty.

Under the legal name Sung Kook Hwang, Mr. Dot Hwang was one of the major financial losers in a significant stock market manipulation case that federal prosecutors are attempting to convict. When the company failed in March 2021, a large portion of Mr. Hwang’s family’s wealth was lost. Archegos had handled money primarily for him, his family, and a few of his employees. Patrick Halligan, the previous chief financial officer of Archegos, is also on trial alongside Mr. Hwang.

Authorities claim that Archegos used tens of billions of borrowed dollars from Wall Street banks to keep purchasing more and more shares, inflating the prices of the stocks it invested in. As a result of other investors’ purchases being spurred by the rising share prices, the prices continued to climb. The tactic raised Mr. Hwang’s net worth to over $35 billion at its height, and Archegos’ total stock holdings were valued at over $100 billion.

William Damian, the U.S. s. When his office announced the filing of charges against Mr. Hwang and Mr. Halligan in April 2022, the attorney for the Southern District of New York in Manhattan referred to Archegos’s plan to artificially inflate stock prices as “historic in scope.”.

The attorney for Mr. Hwang, Barry Berke, remained silent. However, Mr. Dot Berke stated during a court proceeding a few months back that his client “never sold a nickel of his shares.”. “.

This is a case that should never have been brought, according to Mr. Dot Halligan’s attorney Mary Mulligan. “.

Since Archegos did not manage any money for outside investors, it was little known prior to its demise and did not come under much regulatory scrutiny. Nonetheless, considering the amount of risk it had assumed and its disproportionate bank borrowings, which were mostly made possible by the use of complex derivative contracts, it functioned like a large hedge fund.

Although Archegos’s collapse had little effect on the stock market, it resulted in losses for multiple banks. After being acquired by UBS, Credit Suisse lost $5.55 billion. About $861 million was lost by UBS as a result of its loan to Archegos. In response to Credit Suisse’s risk failures in the Archegos affair, UBS agreed to pay regulators in the US and the UK close to $400 million last summer. Other banks that suffered losses included Morgan Stanley and Nomura.

The maximum sentence for Mr. Hwang, if found guilty on all counts, is 220 years in prison; however, a sentence of 20 years is more likely. This is in contrast to Samuel Bankman-Fried, the cryptocurrency entrepreneur who was sentenced in March to 25 years in federal prison for defrauding clients out of $8 billion, who was facing a maximum sentence of 110 years.

On Wednesday, the trial’s jury selection process starts. Two former Archegos employees who entered guilty pleas and consented to cooperate with the investigation will be called as witnesses by the prosecutors.

The federal authorities claimed that officials at Archegos who misrepresented the company’s overall market share to the banks were a crucial part of the plot. Additionally, according to the authorities, Mr. Hwang had participated in a “pump and brag scheme,” which was an attempt to significantly increase the firm’s stock holdings and give the impression that Mr. Hwang was an “extremely wealthy person?”. “.

However, prosecutors have not yet disclosed exactly how Mr. Hwang intended to make money by raising the value of the stocks that Archegos possessed. The trial’s federal judge expressed confusion over Mr. Hwang’s approach of merely purchasing an increasing number of shares.

His goal was to become a big shot, but what did he really want? Judge Alvin Hellerstein stated during a hearing last year, “I suppose that’s possible, but it doesn’t seem to me that was his aim.”. “I’m unable to discern his intent. “.

Evidence regarding possible escape plans for Mr. Hwang will be presented during the trial, according to the prosecution.

Mr. Hwang, a former hedge fund manager, has been charged with breaking federal securities laws twice already.

During an insider trading probe involving his former hedge fund, Tiger Asia Management, he settled civilly and paid a $44 million fine with the Securities and Exchange Commission in 2012. While Tiger Asia entered a guilty plea to federal insider-trading charges in a related case brought by federal prosecutors in New Jersey, Mr. Hwang was not charged criminally.

Mr. Hwang was prohibited from managing public funds for a minimum of five years following his settlement with securities regulators. In 2020, regulators formally lifted the ban. Rather than overseeing funds for external investors, Mr. Hwang concentrated on handling finances for his own family.

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