By Jonathan Stempel
NEW YORK (Reuters) -Bill Hwang, the founder of Archegos Capital Management, should spend 21 years in prison for carrying out a market manipulation scheme that wiped out his $36 billion company and cost his lenders more than $10 billion. dollars, federal prosecutors said Friday.
In a late-night court filing, prosecutors from the U.S. attorney’s office in Manhattan also asked that Hwang be subject to forfeiture of $12.35 million and pay restitution to victims at his sentencing scheduled for Wednesday.
A 21-year sentence would be unusually long for a white-collar crime case in the United States, and only four years less than what cryptocurrency exchange FTX founder Sam Bankman-Fried received in March after being found guilty of steal billions of dollars from their clients.
Prosecutors called Hwang an “unrepentant repeat offender” who appears to have “regarded himself as innocent.”
They cited a 2012 guilty plea to wire fraud by Hwang’s former hedge fund, Tiger Asia Management, and a Nov. 8 request by Hwang’s lawyers that their 60-year-old client not serve prison time for his crimes. activities in Archegos.
“Bill Hwang used his personal hedge fund to commit a fraud that disrupted the U.S. stock market and caused billions of dollars in losses to his trading counterparties,” prosecutors said. “He pursued that fraud even after he was previously ordered not to commit securities fraud. And even now he has no remorse.”
A significant sentence, prosecutors added, “would signal to even the most arrogant investors that their big plans will face serious sentences.”
Hwang’s lawyers did not immediately respond to requests for comment outside of business hours.
Hwang was found guilty in July of 10 criminal charges, including securities and wire fraud and conspiracy to racketeering.
Prosecutors accused him of lying to banks about Archegos’ portfolio so he could aggressively borrow money and make concentrated bets on media and technology stocks like ViacomCBS, through so-called total return swaps.
Hwang accumulated $160 billion of equity exposure, but was unable to meet margin requirements when prices began to fall.
This led to the demise of Archegos in March 2021 and caused huge losses to banks such as Credit Suisse, now part of UBS, and Nomura Holdings, as several banks dumped shares backing Hwang’s swaps.
Hwang did not testify at his two-month trial. He is expected to appeal his conviction.
In asking that he serve no prison time, Hwang’s lawyers said prosecutors did not and could not prove that Hwang’s alleged lies caused the banks losses. They said Hwang’s age, his cardiovascular disease, his philanthropy and his low risk of reoffending also weighed against putting him behind bars.