Reported by Joe Miller

Prosecutors on Monday urged a Manhattan jury to find Archegos founder Bill Hwang guilty of fraud and market manipulation, alleging that he “behaved as though the rules did not apply to him” by artificially inflating stock prices in a scheme that left banks with billions of dollars of losses.

The collapse of the family office in 2021, which briefly roiled Wall Street, “was not a freak accident”, assistant US attorney Andrew Thomas said, as closing arguments got under way after an eight-week trial.

Hwang deliberately deceived lenders and regular investors by disguising his large stakes in companies such as Viacom, Discovery and GSX, and was caught out when the market turned against him, Thomas added.

A lawyer for Hwang, Barry Berke, countered that the government had “worked backwards” in trying to build a criminal case after Archegos’ implosion and had “been in search of a theory” as to how exactly Hwang stood to benefit from building large positions in a handful of shares.

“They have a pump without a dump,” Berke said of the prosecution’s claims. “Mr Hwang did not cash out a nickel.”

Hwang, 60, was relatively unknown beyond Wall Street before March 2021, when the rapid unwinding of Archegos’ positions — quietly built up with derivatives purchased through a plethora of big banks — were revealed to be behind a sudden sell-off in US equity markets.

The resulting losses to Archegos’s lenders — including Credit Suisse, Nomura, Morgan Stanley and UBS — totalled more than $10bn.  

Read full report: https://www.ft.com/content/ebc0ebab-1e0c-41f2-afda-8abd8b108a38