Title: Archegos Capital Management Founder Convicted of Fraud in $36 Billion Market Manipulation Case

In a high-profile trial at Manhattan federal court, Sung Kook "Bill" Hwang, the founder of Archegos Capital Management, has been found guilty of fraud and market manipulation. A jury deliberated on the charges against Hwang and his deputy, Patrick Halligan, before delivering their verdict on Wednesday. Hwang was found guilty on 10 out of 11 criminal counts, while Halligan was found guilty on all three counts he faced.

The charges stem from the 2021 collapse of Archegos, the private investment firm with assets totaling $36 billion. According to prosecutors, Hwang and Halligan engaged in deceptive practices, including lying to banks, to obtain billions of dollars that were used to artificially inflate the stock prices of several publicly traded companies.

The Archegos meltdown sent shockwaves throughout Wall Street and drew regulatory scrutiny across three continents. The trial, which started in May, focused on the implosion of Hwang's family office, which resulted in $10 billion in losses for global banks and over $100 billion in shareholder losses in companies within the portfolio.

Prosecutors alleged that Hwang secretly amassed significant stakes in multiple companies without actually holding their stock. They accused him of misleading banks about the size of Archegos' derivative positions in order to borrow large sums of money that were then used to manipulate the stock prices. Halligan, who served as the chief financial officer at Archegos, was accused of aiding and abetting the scheme.

The jury's verdict means that Hwang and Halligan now face the possibility of a maximum sentence of 20 years in prison for each count they were convicted of. However, the eventual sentences are likely to be lower and will be determined by the judge based on various factors.

The U.S. Justice Department, which brought the case in 2022, considers it an important example of holding accountable individuals who distort and defraud U.S. financial markets. During closing arguments, Assistant U.S. Attorney Andrew Thomas described the defendants' actions as a $100 billion fraud that brought down multiple stocks, harming banks, market participants, and ordinary investors.

Hwang's defense team argued that the indictment was an overly aggressive case of open market manipulation, and that his trading methods were legal. Archegos head trader William Tomita and Chief Risk Officer Scott Becker testified as prosecution witnesses after pleading guilty to related charges and cooperating in the case.

The collapse of Archegos had significant repercussions, with banks demanding additional deposits as stock prices fell in March 2021. When Archegos was unable to meet these demands, the banks sold the stocks behind Hwang's derivative contracts, resulting in massive losses for shareholders, including $5.5 billion for Credit Suisse and $2.9 billion for Nomura Holdings.

The conviction of Hwang serves as a stark reminder of the consequences that can arise from fraudulent practices in the financial markets. It also highlights the need for increased vigilance and regulatory oversight to protect the integrity of the system and safeguard the interests of investors.