Edward Y. Kim, Acting United States Attorney for the Southern District of New York, announced that Bill Hwang, founder and head of Archegos Capital Management, was sentenced to 18 years in prison. U.S. District Judge Alvin K. Hellerstein delivered the sentence following Hwang's conviction on charges including racketeering conspiracy, securities fraud, market manipulation, and wire fraud.
"Bill Hwang weaponized his personal hedge fund, Archegos, to pursue financial fraud on a national scale," stated Acting U.S. Attorney Edward Y. Kim. "Hwang’s crimes brought him to the brink of staggering wealth before his fraud collapsed and left investors, banks, and even Hwang’s own employees with billions of dollars in losses."
The indictment detailed how starting in 2020, Hwang and co-conspirators engaged in manipulative trading schemes using false statements to deceive Archegos's trading partners. Although initially presenting himself as a long-term investor focused on company fundamentals, by late 2020 Hwang shifted strategies towards aggressive trading aimed at manipulating stock prices.
Hwang's actions included purchasing or selling securities at specific times to influence market prices and creating false impressions of interest in certain stocks. As these trades grew larger, counterparties began imposing limits on Archegos's activities. To bypass these restrictions, Hwang and others made misleading statements about their portfolio.
By March 2021, the scheme had heavily influenced Archegos's portfolio risk profile with concentrated investments in companies like ViacomCBS and Discovery. When external events challenged these artificial price levels in late March 2021—such as ViacomCBS announcing an equity offering—Hwang attempted but failed to stabilize stock prices through further purchases.
The resulting collapse led to substantial margin calls that Archegos could not meet, causing significant financial losses for its counterparties as well as ordinary investors who traded at manipulated prices.
In addition to prison time, Hwang was sentenced to three years of supervised release and ordered to pay over nine billion dollars in restitution. Co-defendant Patrick Halligan is set for sentencing on January 27, 2025.
Mr. Kim commended the Federal Bureau of Investigation for their work on this case which is managed by the Office’s Securities and Commodities Fraud Task Force with Assistant U.S. Attorneys Matthew Podolsky, Alexandra Rothman, Samuel P. Rothschild, and Andrew Thomas leading the prosecution.