U.S. DOJ Seeks 21 Years for Archegos Founder Bill Hwang in $10B Fraud Scandal

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U.S. prosecutors demand a 21-year prison term for Bill Hwang, the disgraced founder of Archegos Capital Management, after his market manipulation scheme caused over $10 billion in losses and shook Wall Street. Prosecutors also asked that Hwang be subjected to a $12.35 billion forfeiture and to pay restitution to victims at his scheduled sentencing on Wednesday.

Key Points

Historic Sentence Sought: DOJ requests one of the longest white-collar crime sentences in U.S. history, rivaling Sam Bankman-Fried’s recent FTX sentence.
Massive Losses: Hwang’s scheme led to the collapse of Archegos Capital, wiping out $36 billion and saddling major lenders like Credit Suisse and Nomura with heavy losses.
Repeat Offender: Prosecutors label Hwang an “unrepentant recidivist,” citing his 2012 wire fraud guilty plea with Tiger Asia Management.
Conviction Details: Hwang was convicted in July on 10 charges, including securities fraud, wire fraud, and racketeering conspiracy.
Defense Pushback: Hwang’s lawyers argue for no prison time, citing his age, philanthropy, and lack of direct evidence linking him to bank losses.

Short Narrative

The DOJ is pressing for a landmark 21-year prison sentence for Bill Hwang, whose fraudulent trading practices at Archegos Capital Management rattled the financial world. Prosecutors accuse Hwang of deceiving banks into providing aggressive leverage for high-risk bets on tech and media stocks, leading to Archegos’ $36 billion collapse and $10 billion in lender losses. Labeling him a repeat offender with no remorse, prosecutors argue that such a sentence would deter others from similar schemes.

A significant sentence, prosecutors added, would “signal to even the most hubristic investors that their grand schemes will be met with serious sentences.”

Hwang’s legal team contests the severity of the sentence, pointing to mitigating factors, while he plans to appeal his conviction.

Actionable Insight

This case underscores the critical importance of robust risk management and due diligence in counterparty relationships. Financial institutions should review lending practices to mitigate exposure to concentrated risks.