financetom
Business
financetom
/
Business
/
Bill Hwang's trial begins over collapse of his $36 billion Archegos fund
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Bill Hwang's trial begins over collapse of his $36 billion Archegos fund
May 8, 2024 3:28 AM

NEW YORK, May 8 (Reuters) - Sung Kook "Bill" Hwang's

criminal racketeering trial over the collapse of Archegos

Capital Management begins on Wednesday with the selection of

jurors who will decide if he and a deputy broke the law in a

massive stock scheme that unraveled in just days in 2021.

The trial in Manhattan federal court is expected to last up

to eight weeks and will delve into the implosion of Hwang's

lightly regulated family investment office, which prosecutors

allege caused more than $100 billion in shareholder losses at

companies in its portfolio.

Federal prosecutors accuse Hwang of using derivatives to

secretly amass positions in multiple stocks that were so large

they eclipsed that of the companies' largest investors, driving

up stock prices.

They also claim Hwang and former Archegos Chief Financial

Officer Patrick Halligan then lied about their holdings to

sustain their business relationship with global banks.

Hwang and Halligan are charged with racketeering conspiracy.

Hwang faces an additional 10 counts of fraud and market

manipulation, and Halligan an additional two counts of fraud.

The two men have pleaded not guilty and are expected to

argue prosecutors are pushing a novel and nonsensical market

manipulation theory. Several attorneys told Reuters it may be a

tough case for prosecutors.

Hwang's lawyers have described the case as the "most

aggressive open market manipulation case ever" brought by

prosecutors.

Each count carries a maximum potential sentence of 20 years.

Archegos head trader William Tomita and Chief Risk Officer

Scott Becker have pleaded guilty to related charges and are

expected to testify at the trial.

The trial will begin with jury selection on Wednesday and

Thursday and opening statements on Monday. The judge has said

there are unlikely to be proceedings on Fridays.

Wednesday will focus on identifying potential jurors who can

serve the length of the trial and on Thursday the judge and

legal teams will determine the suitability and impartiality of

potential jurors. There will be 12 jurors and four alternates.

Archegos' March 2021 collapse stemmed from Hwang's use of

financial contracts known as total return swaps to take outsized

stakes in his favorite holdings without actually owning the

stock.

Authorities have said Archegos borrowed aggressively to

boost trading capacity and at its peak had $36 billion in assets

and $160 billion of exposure to equities. Falling stock prices

in March 2021 triggered margin calls that Archegos was unable to

meet.

That led some banks to dump stocks backing his swaps,

causing big losses for Archegos and its lenders, such as Credit

Suisse, now part of UBS, and Nomura Holdings ( NMR ).

U.S. District Judge Alvin Hellerstein, who is overseeing the

trial, rejected Hwang and Halligan's motion to dismiss the case

last year.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
This sustainable jewellery brand is luring some women away from gold
This sustainable jewellery brand is luring some women away from gold
Oct 30, 2023
Aulerth's offerings range from ₹5,000 to as high as ₹2.8 lakh. Are women willing to spend this much on jewellery made from scrap? Founder and CEO Vivek Ramabhadran definitely believes so. Aulerth produces couture-inspired pieces in association with designers like JJ Valaya, Suneet Varma, among others. It has reported 33% repeat customers in the past year and expects a spike to 40% soon.
Tata Power Renewable Energy wins 200-MW project in collaboration with SJVN
Tata Power Renewable Energy wins 200-MW project in collaboration with SJVN
Nov 28, 2023
The firm and dispatchable renewable energy (FDRE) project, designed with a hybrid of solar, wind, and battery storage, is aimed at providing a stable and dispatchable energy supply during peak hours. Shares of Tata Power Company Ltd ended at ₹270.75, up by ₹12.60, or 4.88%, on the BSE.
SJVN secures 200-MW wind power project at ₹3.24 per unit
SJVN secures 200-MW wind power project at ₹3.24 per unit
Nov 16, 2023
Projected to generate 482 million units in its inaugural year post-commissioning, the cumulative energy generation over a 25-year span is anticipated to reach 12,050 million units. Shares of SJVN Ltd ended at ₹75.17, down by ₹0.50, or 0.66%, on the BSE.
Suzlon's S144–3 MW wind turbines get big boost from Indian government
Suzlon's S144–3 MW wind turbines get big boost from Indian government
Nov 15, 2023
Th Suzlon wind turbines received the RLMM (Revised List of Models & Manufacturers) listing from the Ministry of New and Renewable Energy, marking an important milestone for the successful commercialisation of the product. Shares of Suzlon Energy Ltd ended at ₹40.49, up by ₹1.85, or 4.79%, on the BSE.
Copyright 2023-2026 - www.financetom.com All Rights Reserved