NEW YORK, NY – A former Wall Street trader, Bill Hwang, has been found guilty of fraud and market manipulation by a New York jury. The verdict comes over three years after his fund, Archegos, collapsed, causing significant losses for major banks and sending shockwaves through global equity markets.
During the eight-week trial, prosecutors argued that Hwang had engaged in deceptive trading practices, driving up the share price of select media and technology companies through secretive strategies. This led to a sudden sell-off in March 2021, resulting in substantial financial losses for investors and lenders.
Hwang, a devout Christian who was once considered one of the wealthiest evangelicals in America, maintained his composure as the guilty verdict was read. He will remain free on bail until his sentencing on October 28. His attorney declined to comment on the possibility of an appeal.
US attorney Damian Williams highlighted Hwang’s misrepresentation of Archegos’s positions and creditworthiness to investment banks. In response, Hwang’s defense argued that his actions were motivated by genuine interest in the companies, rather than financial gain.
The jury found Hwang guilty on 10 out of the 11 charges brought against him. The former CFO of Archegos, Patrick Halligan, was also convicted on three counts, including racketeering and fraud. The jury deliberated for a day and a half before reaching their decision.
Hwang’s rise to prominence in early 2021 drew attention to the use of equity swaps to build large stakes in companies while concealing the buyer’s identity. The subsequent fallout revealed vulnerabilities in due diligence processes at major financial institutions, resulting in billions of dollars in losses for Archegos’s lenders.
The trial shed light on the lack of transparency in Hwang’s trading activities and the challenges faced by banks in assessing the risks associated with complex financial transactions. It serves as a cautionary tale for investors and regulators in the wake of the Archegos scandal.