Archegos Capital Collapse: A Tale of Lies and Manipulation

The 2021 collapse of Bill Hwang's Archegos Capital Management resulted from alleged manipulation and lies, causing $10 billion in bank losses and over $100 billion in shareholder losses. The trial of Hwang and his deputy, Patrick Halligan, is underway, with the prosecution accusing them of fraudulent trading practices.

The fall of Sung Kook 'Bill' Hwang's Archegos Capital Management in 2021 was fueled by 'lies and manipulation,' a federal prosecutor asserted on Monday during closing arguments at Hwang's criminal trial in Manhattan. The $36 billion investment fund's downfall has become a landmark case in financial fraud.

Jurors were presented with arguments from both sides, focusing on the spectacular collapse of Archegos, which left global financial institutions grappling with $10 billion in losses and inflicted over $100 billion in losses on shareholders of companies held by the fund. Hwang's attorney, Barry Berke, contended that a series of unforeseen events triggered the collapse, criticizing the criminalization of aggressive but lawful trading practices.

Assistant U.S. Attorney Andrew Thomas accused Hwang of manipulating stock prices and deceiving banks, leading to a massive $100 billion fraud. According to the prosecution, Hwang directed Archegos employees to lie and trade in ways that inflated stock prices, leveraging billions borrowed under false pretenses. Both Hwang and his deputy have pleaded not guilty to the charges, which carry potential sentences of up to 20 years in prison for each count.

(With inputs from agencies.)