Bill Hwang, founder of Archegos Capital Management, was found guilty of fraud Wednesday by a Manhattan federal court after the 2021 collapse of his investment firm wiped billions of dollars off financial markets and nearly brought down Wall Street.
The jury delivered a swift conviction, finding Hwang guilty on 10 of 11 criminal counts after beginning deliberations Tuesday afternoon. Hwang’s co-defendant and deputy, Patrick Halligan, was also found guilty.
The criminal conviction comes after prosecutors said Hwang’s family office, Archegos, which operated similarly to a hedge fund, lied to banks to conceal massive stock purchases and artificially inflated the stocks’ values. Hwang’s firm’s positions in stocks like ViacomCBS, Tencent, and Discovery (now Warner Bros. Discovery, CNN’s parent company) were so large that when the stocks started falling, it sent shockwaves through the market.
Archegos’ implosion cost shareholders $100 billion and banks $10 billion, the prosecutors argued.
Hwang’s attorneys asserted that Archegos’ aggressive trades were legal.
In a statement, the US Attorney’s office for the Southern District of New York said Hwang’s guilty verdict sends a message that market manipulation will be held accountable.
“Hwang and Halligan were able to fraudulently inflate a $1.5 billion portfolio into a $36 billion portfolio,” the statement said. “This verdict should send a resounding message that this Office will continue to police the financial markets with an eagle eye and swiftly hold accountable those who think they can cheat the system.”
Hwang, who is 60 years old, could face up to 20 years in prison for each charge.
