The founder of Archegos Capital Management, Bill Hwang, was sentenced to 18 years in prison on Wednesday for securities and market manipulation fraud, a scheme that prosecutors said resulted in billions of dollars in losses for global investment banks.
Hwang received the sentence in Manhattan federal court after expressing remorse to Judge Alvin K. Hellerstein, stating he felt “really terrible for what happened at Archegos,” referring to the hedge fund’s collapse over three years ago.
Although the judge announced the length of the prison term, the sentencing hearing was not completed and will resume on Thursday. Judge Hellerstein remarked that the fraud caused losses exceeding $9 billion across several financial institutions.
During Hwang’s trial in July, prosecutors argued that he and his co-conspirators artificially inflated the value of nearly a dozen stocks. When these inflated investments collapsed in March 2021, they wiped out $100 billion in market value and led to the downfall of Archegos.
Hwang was convicted in July on 10 criminal counts, including securities fraud and wire fraud. However, he was acquitted of one market manipulation charge while being convicted of six others.
Prosecutors said Hwang misled banks into extending billions of dollars in credit, enabling his New York-based investment firm to grow its portfolio from $10 billion to $160 billion.
At the start of the trial, Assistant U.S. Attorney Alexandra Rothman described Hwang as a billionaire who sought “to be a legend on Wall Street” by orchestrating a sophisticated scheme using stock derivatives to secretly amass massive positions in a small number of companies.
The indictment revealed that Archegos exploited securities that didn’t require public disclosure, allowing it to dominate trading and ownership in multiple companies without public knowledge. For example, prosecutors noted that Archegos once secretly controlled more than 50% of ViacomCBS shares.
However, the firm’s reliance on risky, concentrated positions left its portfolio highly vulnerable to market fluctuations. When prices of key stocks dropped in late March 2021, Archegos faced margin calls that triggered over $100 billion in market value losses within days, leading to its collapse.
