Speaking of leverage and using margin loan,…
Bill Hwang was convicted in July on 10 criminal charges including securities and wire fraud and racketeering conspiracy.
Prosecutors accused him of lying to banks about Archegos’ portfolio so he could borrow money aggressively and make concentrated bets on media and technology stocks such as ViacomCBS (NASDAQ:PARA), through so-called total return swaps.
Hwang amassed $160 billion of exposure to stocks but could not meet margin calls as prices began falling.
This led to Archegos’ demise in March 2021 and caused big losses for banks such as Credit Suisse, now part of UBS, and Nomura Holdings (NYSE:NMR) as various banks unloaded stocks backing Hwang’s swaps.
Hwang did not testify at his two-month trial. He is expected to appeal his conviction.
In requesting that he serve no prison time, Hwang’s lawyers said prosecutors did not and could not prove that Hwang’s alleged lies caused losses for banks. They said Hwang’s age, cardiovascular disease, philanthropy and low risk of recidivism also weighed against putting him behind bars.
Hwang’s co-defendant, former Archegos Chief Financial Officer Patrick Halligan, was convicted at the same trial on three criminal charges. His sentencing is scheduled for Jan. 27.
