Former Billionaire Bill Hwang Sentenced to 18 Years Over Archegos Collapse

Sung Kook “Bill” Hwang, the former billionaire investor and founder of Archegos Capital Management, has been sentenced to 18 years in prison for his role in the firm’s catastrophic collapse, which resulted in over $10 billion in losses to Wall Street banks.

The sentencing, handed down by U.S. District Judge Alvin Hellerstein in Manhattan, follows Hwang’s July conviction on 10 criminal charges, including wire fraud, securities fraud, and market manipulation. “The amount of losses that were caused by your conduct are larger than any other losses I have dealt with,” Hellerstein remarked before delivering the sentence.

Archegos’ downfall in March 2021 unfolded in less than a week, shocking Wall Street and leaving Hwang’s lenders reeling. Prosecutors from the U.S. Attorney’s office in Manhattan had sought a 21-year prison term for Hwang, an unusually lengthy sentence for a white-collar case. They also pushed for Hwang to forfeit $12.35 billion and pay restitution to victims, describing the case as a “national calamity.”

“It stands among a rare class of cases that truly could be described as a national calamity,” said prosecutor Andrew Thomas during the sentencing hearing.

While Judge Hellerstein sentenced Hwang to 18 years, he did not yet rule on whether Hwang must forfeit funds or pay restitution. A decision on those matters is expected when the sentencing hearing resumes on Thursday.

During the proceedings, Hellerstein compared Hwang’s case to that of Sam Bankman-Fried, who received a 25-year prison sentence in March for misappropriating $8 billion from users of the now-bankrupt cryptocurrency exchange FTX. Bankman-Fried, who denies wrongdoing and is appealing his conviction, was described by Hwang’s lawyer, Dani James, as fundamentally different. “Mr. Bankman-Fried was literally stealing from his customers,” James argued. “I don’t think that’s what’s happened here.”

Hwang’s defense team requested no prison time, forfeiture, or restitution, arguing that a lengthy sentence was unnecessary given his low risk of reoffending. “The notion that he would commit a crime in the future, it’s just not so,” James said.

Hwang, 60, had established Archegos in 2013 as a family office, following the guilty plea of his former hedge fund, Tiger Asia Management, to wire fraud in an insider trading case. A protégé of the late hedge fund billionaire Julian Robertson, Hwang’s Archegos amassed $160 billion in stock exposure at its peak, leveraging aggressive borrowing to make concentrated bets on companies such as ViacomCBS, now Paramount Global.

The collapse occurred when Archegos was unable to meet margin calls as the value of its key stock holdings plummeted. Banks, including Credit Suisse and Nomura Holdings, suffered significant losses as they unloaded stocks backing Hwang’s total return swaps. Credit Suisse alone reported a $5.5 billion loss, while over $100 billion in market value tied to Hwang’s stock positions evaporated.

In his defense, Hwang’s lawyers cited his Christian faith and philanthropic efforts through the Grace and Mercy Foundation, which has donated at least $600 million since 2006 to causes such as homelessness, poverty, and human trafficking. Before his sentencing, Hwang expressed his intention to serve others despite his circumstances. “I hope this punishment will allow me to serve as much as I can given the circumstances,” Hwang stated.

Once a billionaire, Hwang’s legal team claimed his net worth has fallen to “at most” $55.3 million.

Hwang’s co-defendant, Patrick Halligan, Archegos’ former Chief Financial Officer, was convicted of three criminal charges at the same trial. His sentencing is scheduled for January 27. Neither Hwang nor Halligan testified during the two-month trial.

By fLEXI tEAM