Archegos founder gets 18 years, jail for massive fraud

Bill Hwang also guilty of market manipulation; collapse of his investment firm caused banks $13.4b in losses

A US federal judge sentenced Bill Hwang, founder of Archegos Capital Management, on Nov 20 to 18 years in prison for his role in the collapse of his once giant investment firm that caused roughly US$10 billion (S$13.4 billion) in losses for Wall Street banks.

Hwang, whose legal name is Hwang Sung Kook, was convicted in July by a federal jury in Manhattan after nearly two days of deliberation following a two-month trial.

Federal prosecutors called 21 witnesses, including two former employees of Archegos, which Hwang had set up in 2013 as a giant family office.

Archegos traded like a hedge fund for much of its existence, using bor-rowed money from Wall Street banks to make big bets on stocks. However, as it was a family office that managed mainly Hwang's family money, it operated without much regulatory oversight.

The sudden collapse in 2021 of Archegos - which managed US$36 billion of Hwang's family money wiped out most of his personal fortune, in addition to causing the steep losses for the banks that had facilitated his firm's trading.

The effect of Archegos' failure on the broader stock market was limited. But several banks, including UBS, Morgan Stanley and Nomura, suffered losses.