Archegos founder sentenced to 18 years in prison according to media report
Published: Thursday, Nov 21st 2024, 10:20
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The founder of the collapsed US hedge fund Archegos, Bill Hwang, was sentenced to 18 years in prison on Wednesday for massive fraud, according to US media reports. "The sentence must reflect the seriousness of the offense," the New York Times quoted Judge Alvin Hellerstein as saying. A jury in New York found Hwang, who was born in South Korea, guilty on ten of eleven charges in July and he was facing life imprisonment.
Hwang caused billions in losses for numerous banks. His fund bet enormous sums on just a few shares; most of the money was borrowed. The plan initially worked, and the fund multiplied in size in just one year. Hwang's personal assets rose from 1.5 to 35 billion dollars.
However, when some of the bets went wrong and traders demanded more collateral, Archegos was unable to inject any more money and the fund collapsed in March 2021, causing the banks - including institutions such as Credit Suisse and Morgan Stanley - to lose billions. In the case of CS, this led to its near bankruptcy in 2023 and its takeover by UBS.
©Keystone/SDA
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