By Jonathan Stempel
NEW YORK (Reuters) – Invoice Hwang, the founding father of Archegos Capital Administration, ought to spend 21 years in jail for working a market manipulation scheme that worn out his $36 billion agency and value its lenders greater than $10 billion, federal prosecutors mentioned on Friday.
Hwang, 60, faces a scheduled Nov. 20 sentencing in Manhattan federal court docket after being convicted in July on 10 felony costs together with securities and wire fraud and racketeering conspiracy.
Prosecutors accused Hwang of mendacity to banks about Archegos’ portfolio so he may borrow cash aggressively and make concentrated bets on media and know-how shares equivalent to ViacomCBS (NASDAQ:), via so-called whole return swaps.
Hwang amassed $160 billion of publicity to shares, however was unable to fulfill margin calls as costs started falling.
This led to Archegos’ demise in March 2021 and prompted huge losses for banks equivalent to Credit score Suisse, now a part of UBS, and Nomura Holdings (NYSE:) as varied banks unloaded shares backing Hwang’s swaps.
Hwang didn’t testify at his two-month trial. He’s anticipated to enchantment his conviction.
On Nov. 8, Hwang’s attorneys mentioned he ought to obtain no jail time.
The attorneys mentioned prosecutors didn’t and can’t show Hwang’s alleged lies prompted losses for banks. Additionally they mentioned Hwang’s age, heart problems, philanthropy and low threat of recidivism weighed in opposition to placing him behind bars.
Hwang’s co-defendant, former Archegos Chief Monetary Officer Patrick Halligan, was convicted on the similar trial on three felony costs. His sentencing is scheduled for Jan. 27, 2025.
