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Prosecutors Claim Bill Hwang’s Archegos Was Built on Lies


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Manhattan Federal Court Opens Trial on Alleged Market Manipulation by Archegos Founder Bill Hwang. 

Bill Hwang, founder of Archegos Capital Management, exits Manhattan federal court after the first day of his corruption trial on Monday, May 13, 2024 

Image Source: KARK
Bill Hwang, founder of Archegos Capital Management, exits Manhattan federal court after the first day of his corruption trial on Monday, May 13, 2024 
Image Source: KARK 

Sung Kook “Bill” Hwang’s trial began in Manhattan federal court, where he stands accused of deceiving Wall Street banks to obtain billions in funding, allegedly inflating stock prices.  

According to Assistant U.S. Attorney Alexandra Rothman, Hwang’s ambition to become a Wall Street legend drove him to manipulate the market, transforming Archegos into a criminal operation. She told the jury, “Bill Hwang was a billionaire and yet he risked nearly everything because he wanted more: more money, more success, more power.” Hwang’s attorney, Barry Berke, countered that his client invested heavily in companies he believed in, asserting, “The reason he did it was because he had the courage of his convictions.” 

Bill Hwang, Chief Executive Officer and founder of Archegos Capital Management, left, accompanied by attorney Barry Berke, arrives at federal court in New York, US. 

Image Source: New York Post
Bill Hwang, Chief Executive Officer and founder of Archegos Capital Management, left, accompanied by attorney Barry Berke, arrives at federal court in New York, US. 
Image Source: New York Post 
Former Archegos Chief Financial Officer, Patrick Halligan, departs the Manhattan federal courthouse in New York City, U.S. 

Image Source: Reuters
Former Archegos Chief Financial Officer, Patrick Halligan, departs the Manhattan federal courthouse in New York City, U.S. 
Image Source: Reuters 

The trial, watched closely on Wall Street, promises insights into how banks deal with high-risk clients. Hwang and Halligan, his former Chief Financial Officer, face charges of racketeering conspiracy. Hwang faces additional charges including fraud and market manipulation. Each charge carries a potential 20-year prison sentence. 

Prosecutors allege that Hwang used total return swaps to build large stakes in companies without directly owning shares, driving up stock prices. The collapse of Archegos in March 2021 caused over USD 100 billion in shareholder losses. William Tomita, Archegos’ head trader, and Scott Becker, Chief Risk Officer, have pleaded guilty and are expected to testify. 

During Monday’s testimony, Bryan Fairbanks, a former risk manager at UBS, stated, “All the information they had shared with us was made up.” Fairbanks’ testimony highlights the alleged deception by Archegos, which led to significant losses for UBS. 

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