Former billionaire investor Sung Kook “Bill” Hwang received an 18-year prison sentence on Wednesday for the collapse of Archegos Capital Management, which caused more than $10 billion in losses for Wall Street banks.
U.S. District Judge Alvin Hellerstein handed down the sentence in Manhattan after a jury convicted Hwang in July on 10 criminal charges, including wire fraud, securities fraud, and market manipulation. “The amount of losses caused by your conduct exceeds any other losses I have ever encountered,” Hellerstein stated before announcing the sentence.
Archegos collapsed in March 2021 in less than a week, shocking Wall Street and Hwang’s lenders. Prosecutors sought a 21-year prison term, a forfeiture of $12.35 billion, and restitution for victims, describing the case as “a national calamity,” according to prosecutor Andrew Thomas.
Judge Hellerstein deferred decisions on forfeiture and restitution, with the sentencing hearing expected to resume Thursday.
Comparison to Other Financial Crimes
Before delivering the sentence, Hellerstein questioned Hwang’s lawyer, Dani James, about how Hwang’s actions compared to those of Sam Bankman-Fried, who had been sentenced to 25 years in March for misappropriating $8 billion from customers of the now-bankrupt FTX exchange.
“Mr. Bankman-Fried stole directly from his customers,” James argued. “That is not what happened here.”
Hwang’s lawyers asked the court for no prison time, forfeiture, or restitution, arguing that Hwang’s low likelihood of reoffending rendered a lengthy sentence unnecessary. “The notion that he would commit a crime in the future simply isn’t true,” James insisted.
Archegos’ Rise and Fall
Hwang, 60, founded Archegos in New York in 2013 as a family office after his former hedge fund, Tiger Asia Management, pleaded guilty to wire fraud in an insider-trading case. A protégé of hedge-fund billionaire Julian Robertson, Hwang grew Archegos into a $36 billion operation by borrowing aggressively and making concentrated bets on media and technology stocks, including ViacomCBS (now Paramount Global).
Prosecutors accused Hwang of lying to banks about Archegos’ portfolio to secure additional loans, which enabled him to leverage up to $160 billion in stock exposure. However, his strategy unraveled when falling stock prices triggered margin calls he couldn’t meet, prompting banks to sell off stocks tied to Archegos’ swaps.
The fallout wiped out more than $100 billion in market value, with banks like Credit Suisse and Nomura Holdings suffering significant losses. Credit Suisse lost $5.5 billion before its merger with UBS.
Defense Arguments and Final Statements
Hwang’s lawyers emphasized his Christian faith and his philanthropic contributions through his Grace and Mercy Foundation, which has donated over $600 million since 2006 to address homelessness, poverty, and human trafficking. Hwang’s net worth, once substantial, has dropped to an estimated $55.3 million.
Addressing the court before sentencing, Hwang expressed hope that his punishment would allow him to serve others as much as possible under the circumstances.
Hwang’s co-defendant, Patrick Halligan, the former CFO of Archegos, was convicted on three charges during the same trial. His sentencing is set for January 27. Neither Hwang nor Halligan testified during their two-month trial.
