In a Manhattan federal courtroom on Wednesday, Sung Kook "Bill" Hwang appeared for the start of his criminal racketeering trial related to the collapse of Archegos Capital Management. Hwang, along with a deputy, is facing charges for their involvement in a stock scheme that unraveled in a matter of days in 2021.

Dressed in a dark suit and purple tie, Hwang entered the courtroom for the first day of screening potential jurors. Each potential juror was individually questioned in the judge's chambers to determine their ability to commit to the expected eight weeks of trial. Those who pass this initial round will undergo further questioning on Thursday to determine their suitability before the final panel is chosen.

The trial will delve into the implosion of Hwang's lightly regulated family investment office, which prosecutors allege caused shareholder losses amounting to over $100 billion in companies within its portfolio. Federal prosecutors claim that Hwang used derivatives to secretly accumulate large positions in multiple stocks, surpassing even the largest investors in those companies, thus driving up stock prices. Furthermore, they allege that Hwang and the former Archegos chief financial officer Patrick Halligan lied about their holdings to maintain their business relationship with global banks.

Hwang is facing charges of racketeering conspiracy, as well as 10 counts of fraud and market manipulation. Halligan, on the other hand, is facing two counts of fraud. Both men have pleaded not guilty and are expected to argue against the prosecutors' allegations, claiming a novel and nonsensical market manipulation theory.

Legal experts suggest that the case may prove challenging for the prosecutors. According to Hwang's defense team, this case represents the most aggressive open-market manipulation case ever brought by prosecutors.

Two key individuals from Archegos, head trader William Tomita and chief risk officer Scott Becker, have already pleaded guilty to related charges and are anticipated to testify during the trial. Opening statements are set to commence on Monday in front of 12 jurors and four alternates. The judge has mentioned that there will likely be no proceedings on Fridays.

The collapse of Archegos in March 2021 stemmed from Hwang's utilization of financial contracts known as total return swaps, enabling him to hold large stakes in his preferred holdings without actually owning the stock. The firm borrowed extensively to increase its trading capacity, reaching $36 billion in assets and $160 billion in equity exposure at its peak. However, when stock prices fell in March, margin calls were triggered, which Archegos failed to meet. This led to several banks liquidating stocks underlying the swaps, resulting in significant losses for Archegos as well as its lenders, including Credit Suisse (now part of UBS) and Nomura Holdings.

US District Judge Alvin Hellerstein, who is overseeing the trial, denied Hwang and Halligan's motion to dismiss the case last year.