A jury in New York has found Wall Street investor Sung Kook “Bill” Hwang guilty of fraud and market manipulation. This verdict comes three years after the collapse of his investment fund, Archegos Capital Management, which resulted in billions of dollars in losses for several major banks.
Prosecutors accused Hwang of misleading lenders while secretly building large positions in several companies. When Archegos could not meet its financial obligations, it led to a massive sell-off of stocks, causing the fund to fail.
Hwang’s deputy at Archegos, Patrick Halligan, was also found guilty on all three counts he faced. Sentencing for both men is scheduled for October 28, although they will remain free on bail.
“While we respect the jury, we intend to appeal and believe our client will be exonerated,” stated Mary Mulligan, Halligan’s attorney.
US attorney Damian Williams remarked that Hwang and Halligan misrepresented Archegos’s positions and key financial metrics that investment banks relied on to assess creditworthiness. “In doing so, they fraudulently inflated a $1.5 billion portfolio into a $36 billion portfolio,” he noted.
Hwang had pleaded not guilty to one count of racketeering conspiracy, three counts of fraud, and seven counts of market manipulation. Halligan also pleaded not guilty to similar charges, including one count of racketeering conspiracy and two counts of fraud.