The founder of Archegos Capital Management Bill Hwang was sentenced to 18 years in prison for orchestrating a securities and market manipulation scheme that caused over $9 billion in losses to global financial institutions.
Convicted on multiple criminal charges, Hwang was accused of artificially inflating stock values through secretive, high-risk trading practices, ultimately leading to the collapse of Archegos in March 2021 and wiping out $100 billion in market value.
Prosecutors revealed that Hwang used derivatives to hide his firm’s dominance in several companies, making its portfolio vulnerable to sharp fluctuations.
According to the indictment, the investment public did not know Archegos had come to dominate the trading and stock ownership of multiple companies because it used securities that had no public disclosure requirement. For instance, prosecutors said, Hwang and his firm once secretly controlled over 50 percent of the shares of ViacomCBS.
Despite expressing remorse Hwang faced severe penalties for his role in one of Wall Street’s largest financial frauds.
