Korean-American billionaire Sung Kook “Bill” Hwang (Han named Huang Chengguo) is facing federal charges for market manipulation, which not only led to the collapse of his $36 billion hedge fund management company Archegos in 2021 but also resulted in over $10 billion in losses for creditors. Prosecutors are seeking a 21-year prison sentence for him.
According to Reuters, in a late-night court filing, the Manhattan U.S. Attorney’s Office is also seeking to seize Hwang’s $12.35 billion in assets and order him to pay restitution to victims at his sentencing scheduled for next Wednesday, November 20.
Compared to other white-collar crime cases in the U.S., a 21-year sentence is unusually long, only four years shorter than Sam Bankman-Fried, the founder of FTX cryptocurrency exchange, who was convicted in March for embezzling billions from clients.
Back in July, Hwang was convicted on 10 criminal charges, including securities and wire fraud, and conspiracy to extort. Prosecutors described him as an “unrepentant habitual offender” who seems to “consider himself innocent.”
Prosecutors mentioned that when Hwang’s former hedge fund Tiger Asia Management LLC collapsed in 2012, he admitted to telecommunications fraud related to illegal trading of Chinese stocks. Hwang’s lawyer submitted a request last Friday, November 8, arguing that his 60-year-old client should not be imprisoned for his actions at Archegos.
Prosecutors stated, “Hwang used his personal hedge fund to commit fraud, altering the U.S. stock market and causing his trading counterparts billions in losses. He had been previously ordered not to engage in securities fraud but continued his fraudulent behavior. Even now, he shows no remorse.”
In the Tiger Asia case, Hwang eventually paid $44 million to settle U.S. insider trading charges. In early 2013, he transformed Tiger Asia into a family office and renamed it Archegos Capital Management.
Prosecutors added that imposing a harsh sentence on him will “send a message to even the most arrogant investors that their ‘grand’ schemes will face severe penalties.”
Hwang’s lawyer did not immediately respond to Reuters’ request for comment.
Prosecutors accuse Hwang of concealing Archegos’ investment portfolio from banks to massively borrow through total return swaps, concentrating bets on media and tech stocks like ViacomCBS.
Hwang accumulated a $160 billion exposure to stock risks, but as prices began to fall, he failed to meet margin requirements.
This led to the collapse of Archegos, valued at $36 billion in March 2021, causing a stir on Wall Street and resulting in major losses for banks including Credit Suisse, later acquired by UBS, and Nomura Holdings, totaling $10 billion, as well as approximately $100 billion in shareholder losses.
Some media outlets have labeled this event as the “largest single-day losses in history” and the “century’s biggest liquidation.”
Hwang did not testify during the two-month trial, and he is expected to appeal his conviction.
In the request to avoid imprisonment, Hwang’s lawyers argued that prosecutors failed to prove that Hwang’s alleged lies caused bank losses. They also cited factors such as Hwang’s age, cardiovascular disease, involvement in charity, and low risk of reoffending as influencing his likelihood of going to jail.
Hwang’s co-defendant, former Archegos CFO Patrick Halligan, was found guilty on all three criminal charges as a co-conspirator. His sentencing is set for January 27.