NEW YORK, July 9 (Reuters) - A jury in Manhattan federal

court began deliberations on Tuesday in the criminal case

against Archegos Capital Management founder Sung Kook "Bill"

Hwang, accused by prosecutors of manipulating stock prices

before the 2021 collapse of his $36 billion private investment

firm.

Prosecutors and defense lawyers delivered closing arguments

on Monday in the trial of Hwang and Patrick Halligan, his

Archegos deputy and co-defendant.

Hwang's lawyer told jurors that the prosecution has

criminalized aggressive but legal trading methods. A federal

prosecutor painted a different picture, saying Hwang and

Halligan unlawfully pumped up stock prices and lied about the

holdings of Archegos to the banks with which they traded.

U.S. District Judge Alvin Hellerstein instructed jurors on

the law before deliberations began.

Hwang, 60, pleaded not guilty to one count of racketeering

conspiracy and 10 counts of fraud and market manipulation.

Halligan, 47, pleaded not guilty to fraud and racketeering

conspiracy. If convicted, they face maximum sentences of 20

years in prison on each charge, though any sentence would likely

be much lower and would be imposed by the judge based on a range

of factors.

The trial, which began in May, centers on the implosion of

Archegos - a spectacular collapse that left global banks nursing

billions in losses and, according to prosecutors, caused more

than $100 billion in shareholder losses at companies in its

portfolio.

Prosecutors have accused Hwang of secretly amassing outsized

stakes in multiple companies without actually holding their

stock. They have said Hwang lied to banks about the size of

Archegos' derivative positions to borrow billions of dollars

that he and his deputies then used to inflate the underlying

stocks.

According to the U.S. Attorney's Office for the Southern

District of New York, which brought the case, Hwang's positions

eclipsed those of the companies' largest investors, driving up

stock prices. At its peak, prosecutors said Archegos had $36

billion in assets and $160 billion of exposure to equities.

When stock prices fell in March 2021, the banks demanded

additional deposits, which Archegos could not make. The banks

then sold the stocks backing Hwang's swaps, wiping out $100

million in value for shareholders and $40 billion at the banks,

including $5.5 billion for Credit Suisse, now part of UBS

, and $2.9 billion for Nomura Holdings ( NMR ).