U.S. Attorney Damian Williams | U.S. Department of Justice
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced that Bill Hwang, founder and head of Archegos Capital Management, has been sentenced to 18 years in prison. U.S. District Judge Alvin K. Hellerstein handed down the sentence following Hwang's conviction on charges including racketeering conspiracy, securities fraud, market manipulation, and wire fraud.
Acting U.S. Attorney Edward Y. Kim stated: “Bill Hwang weaponized his personal hedge fund, Archegos, to pursue financial fraud on a national scale... Today’s sentence sends a clear message that criminal manipulation schemes will be met with serious prison sentences.”
The charges stem from activities beginning in 2020 when Hwang and his co-conspirators engaged in manipulative trading and made false statements to trading counterparties. Although initially presenting himself as an investor focused on company fundamentals, by late 2020, Hwang was involved in frequent trading aimed at manipulating stock prices.
Hwang's strategies included buying or selling securities at specific times to influence prices and misrepresenting Archegos’s portfolio to counterparties to secure larger trades and credit extensions. By March 2021, these actions had significantly altered Archegos's portfolio risk profile.
The market exposed the manipulation when ViacomCBS announced a seasoned equity offering on March 22, 2021. In response, Hwang attempted further stock purchases but ultimately failed to prevent significant losses when margin calls could not be met.
The schemes led to billions in losses affecting various market participants including counterparties misled by false information and ordinary investors who traded at artificial prices. Innocent employees of Archegos also suffered financial losses due to deferred compensation tied up with the firm.
In addition to imprisonment, Hwang was sentenced to three years of supervised release and ordered to pay over nine billion dollars in restitution. Patrick Halligan, Archegos’s Chief Financial Officer convicted alongside Hwang, is scheduled for sentencing on January 27, 2025.
Mr. Kim commended the Federal Bureau of Investigation for their work on this case handled by the Securities and Commodities Fraud Task Force with Assistant U.S. Attorneys Matthew Podolsky, Alexandra Rothman, Samuel P. Rothschild, and Andrew Thomas leading the prosecution.