Archegos Founder Bill Hwang Convicted in Shocking Fraud Trial: The Downfall That Shook Wall Street
NEW YORK, July 10 (Reuters) – Sung Kook “Bill” Hwang, founder of Archegos Capital Management, was convicted on Wednesday by a Manhattan federal jury of fraud and other charges. Hwang faced accusations of market manipulation that preceded the 2021 collapse of his $36 billion private investment firm. Jurors began deliberating on Tuesday and found Hwang guilty on 10 out of 11 counts, while his deputy, Patrick Halligan, was found guilty on all three counts he faced. Both defendants, who pleaded not guilty, were present with their attorneys as the verdict was read.
The dramatic failure of Archegos sent ripples through Wall Street and drew regulatory attention worldwide. Prosecutors alleged that Hwang and Halligan deceived banks to secure billions in funds, which were then used to inflate stock prices of numerous publicly traded companies artificially.
During the trial, which began in May, prosecutors argued that Hwang’s actions led to significant losses, including $10 billion for global banks and over $100 billion for shareholders. Hwang was accused of secretly amassing large stock positions via derivatives and lying to banks about the size of these positions. Halligan, the former CFO of Archegos, was accused of aiding this fraudulent scheme.
The case highlighted the significant impact of Hwang’s manipulative strategies on U.S. financial markets and ordinary investors. The defense contended that Hwang’s trading methods, while aggressive, were legal. Two former Archegos employees testified against Hwang after pleading guilty to related charges.
Prosecutors painted a picture of massive fraud, with Archegos holding $36 billion in assets and $160 billion in exposures at its peak. The collapse occurred when stock prices dipped in March 2021, leading to banks demanding additional deposits that Archegos couldn’t provide, which resulted in massive sell-offs and substantial financial losses, including $5.5 billion for Credit Suisse and $2.9 billion for Nomura Holdings.
Reporting by Jody Godoy; Editing by Will Dunham.
Original Story https://www.livemint.com/news/archegos-founder-bill-hwang-convicted-at-fraud-trial-over-fund-s-collapse-11720645225264.html
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