Hwang had been convicted in July on 10 legal costs together with wire and securities fraud, market manipulation.
Former billionaire investor Sung Kook “Invoice” Hwang has been sentenced to 18 years in jail over the collapse of Archegos Capital Administration, which price Wall Avenue banks greater than $10bn.
Hwang was sentenced on Wednesday by United States District Choose Alvin Hellerstein in Manhattan, the place a jury convicted Hwang in July on 10 legal costs together with wire fraud, securities fraud and market manipulation.
“The quantity of losses that have been brought on by your conduct are bigger than every other losses I’ve handled,” Hellerstein mentioned earlier than saying the sentence.
Archegos’s March 2021 implosion took lower than every week, gorgeous Wall Avenue and Hwang’s lenders.
The US Legal professional’s workplace in Manhattan sought a 21-year jail time period for Hwang – unusually lengthy for a white-collar case – and for him to forfeit $12.35bn and make restitution to victims.
“It stands amongst a uncommon class of circumstances that actually may very well be described as a nationwide calamity,” prosecutor Andrew Thomas mentioned on the sentencing listening to earlier than Hellerstein.
Hellerstein didn’t attain a choice on Wednesday on whether or not Hwang should forfeit cash or pay restitution. The sentencing listening to is predicted to renew on Thursday.
Earlier than sentencing Hwang, Hellerstein requested the defendant’s lawyer, Dani James, how she thought Hwang in comparison with Sam Bankman-Fried, who was sentenced in March to 25 years in jail for stealing $8bn from customers of the now-bankrupt FTX trade.
“Mr Bankman-Fried was actually stealing from his clients,” James mentioned. “I don’t assume that’s what’s occurred right here.”
Hwang had requested for no jail, forfeiture or restitution, and to stay free on bail whereas he appealed his conviction. James mentioned his low danger of committing extra crimes meant a prolonged jail time period served no function.
“The notion that he would commit a criminal offense sooner or later, it’s simply not so,” James mentioned.
Bankman-Fried denies wrongdoing and is interesting his conviction.
Aggressive borrowing
Hwang, 60, was a protege of late hedge-fund billionaire Julian Robertson.
He arrange Archegos in New York as a household workplace in 2013, the 12 months after his former hedge fund Tiger Asia Administration pleaded responsible to wire fraud in an insider buying and selling case.
Prosecutors accused Hwang of mendacity to banks about Archegos’s portfolio so he may borrow cash aggressively and make concentrated bets on media and know-how shares resembling ViacomCBS, now known as Paramount International.
Whereas Archegos ultimately managed $36bn, Hwang’s borrowing helped him amass $160bn of publicity to shares.
His downfall occurred when Hwang was unable to fulfill margin calls, as the costs of a few of his favorite shares started falling and numerous banks unloaded shares that had backed his so-called whole return swaps.
Greater than $100bn of market worth in Hwang’s shares was worn out. A number of banks suffered losses, together with Credit score Suisse, which misplaced $5.5bn, and Nomura Holdings. Credit score Suisse is now a part of UBS.
Hwang’s legal professionals’ request for no punishment additionally cited Hwang’s Christian religion and his nonprofit Grace and Mercy Basis, which has, since 2006, donated at the very least $600m to fight homelessness, poverty and human trafficking, amongst different causes.
In an announcement to the courtroom earlier than Hellerstein introduced the sentence, Hwang mentioned he hoped the punishment would “permit me to function a lot as I can given the circumstances”.
Hwang’s legal professionals have mentioned his web value has fallen to “at most” $55.3m.
Hwang’s co-defendant, former Archegos Chief Monetary Officer Patrick Halligan, was convicted on the identical trial on three legal costs. His sentencing is scheduled for January 27. Each selected to not testify at their two-month trial.
