Former billionaire investor Sung Kook “Invoice” Hwang was sentenced to 18 years in jail on Wednesday over the collapse of Archegos Capital Administration, which price Wall Road banks greater than $10bn.
Hwang was sentenced by US district decide Alvin Hellerstein in Manhattan, the place a jury convicted Hwang in July on 10 legal costs together with wire fraud, securities fraud and market manipulation.
Archegos’s March 2021 implosion took lower than every week, gorgeous Wall Road and Hwang’s lenders.
The US lawyer’s workplace in Manhattan sought a 21-year jail time period for Hwang – unusually lengthy for a white-collar case – and for him to forfeit $12.35bn and make restitution to victims.
“It stands amongst a uncommon class of circumstances that actually might be described as a nationwide calamity,” prosecutor Andrew Thomas stated on the sentencing listening to earlier than Hellerstein.
Hwang, 60, arrange Archegos in New York as a household workplace in 2013, the yr after his former hedge fund, Tiger Asia Administration, pleaded responsible to wire fraud in an insider-trading case.
Prosecutors accused Hwang of mendacity to banks about Archegos’s portfolio so he may borrow cash aggressively and make concentrated bets on media and know-how shares equivalent to ViacomCBS, now known as Paramount International.
Whereas Archegos ultimately managed $36bn, Hwang’s borrowing helped him amass $160bn of publicity to shares.
His downfall occurred when Hwang was unable to satisfy margin calls, as the costs of a few of his favourite shares started falling and numerous banks unloaded shares that had backed his so-called complete return swaps.
Greater than $100bn of market worth in Hwang’s shares was worn out. A number of banks suffered losses, together with Credit score Suisse, which misplaced $5.5bn, and Nomura Holdings. Credit score Suisse is now a part of UBS.
Hwang’s attorneys’ request for no punishment additionally cited Hwang’s Christian religion and his non-profit Grace and Mercy Basis, which has since 2006 donated at the least $600m to fight homelessness, poverty and human trafficking, amongst different causes.
Hwang’s attorneys have stated his internet value has fallen to “at most” $55.3m.
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