Disgraced investor Sung Kook “Bill” Hwang was sentenced to 18 years in prison on Wednesday for fraud and market manipulation in connection to the stunning collapse of Archegos Capital Management.
US District Judge Alvin Hellerstein announced the sentence in Manhattan federal court, months after a jury convicted Hwang in July on 10 criminal charges including wire fraud, securities fraud and market manipulation. Wall Street banks lost more than $10 billion as a result of Hwangs scheme.
The 18-year sentence while harsh for a white-collar crime was less than the 21 years sought by prosecutors. Meanwhile, Hwangs attorneys initially sought no jail time.
“It stands among a rare class of cases that truly could be described as a national calamity,” prosecutor Andrew Thomas said at the sentencing hearing.
Hwang, 60, was found guilty of lying to major banks about Archegoss portfolio in order to secure billions of dollars that he used to make bets on media and technology stocks like ViacomCBS and Discovery. At its peak, Archegos was managing $36 billion.
The scheme unraveled in a matter of days in March 2021 after the bets went south and Hwang was left unable to meet margin calls. Credit Suisse lost more than $5 billion and Japanese bank Nomura lost more than $3 billion during the resulting meltdown.
Ahead of the sentencing, Hellerstein asked Hwangs attorney, Dani James, to discuss how she felt her clients actions compared to those of convicted FTX fraudster Sam Bankman-Fried, who was sentenced to 25 years in prison for stealing more than $8 billion from the doomed crypto firms customers.
“Mr. Bankman-Fried was literally stealing from his customers,” James said. “I don’t think that’s what’s happened here.”
Hellerstein told Hwang that the amount of losses that were caused by your conduct are larger than any amount of losses Ive deal with as a judge,according to Bloomberg.
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Hwang’s lawyers said the investor, who was once considered a billionaire, had seen his net worth dwindle to “at most” $55.3 million.
Hwangs co-defendant in the case, Archegoss ex-CFO Patrick Halligan, is scheduled to be sentenced on Jan. 27. He was convicted on three criminal charges at the same trial in July.
With Post wires