'Margin Call' Bill Hwang Found Guilty... "May Spend Remaining Life in Prison"

Jury Finds Guilty on 10 of 11 Charges
"Up to 20 Years Possible for Each Charge"
Sentencing Hearing on October 28

Korean-American investor Bill Hwang (Korean name Hwang Sung-guk), who triggered the 2021 Wall Street derivatives margin call crisis, has been found guilty.

According to major foreign media including The New York Times (NYT) on the 10th (local time), the jury at the criminal court in Manhattan, New York, delivered guilty verdicts on 10 out of 11 charges including securities fraud, extortion, and market manipulation in Hwang's trial held that day. Patrick Halligan, Chief Financial Officer (CFO) of Arkeogos Capital Management, who was indicted alongside Hwang, was also found guilty on all three charges including fraud and extortion.

[Image source=Reuters Yonhap News]

Hwang's personal investment firm, Arkeogos, had previously entered into total return swap (TRS) and contract for difference (CFD) agreements with investment banks and invested over $50 billion, more than five times its assets, in stocks. However, as the stock prices of the invested securities fell, margin calls requiring additional collateral payments occurred, and the damage began to spread across Wall Street starting when Goldman Sachs quickly sold the collateral stocks through a block deal. Authorities estimated that the losses incurred by financial firms at the time reached $10 billion (approximately 13.6 trillion KRW).

When indicting Hwang and others in 2022, prosecutors stated that they deceived financial companies to borrow large sums and manipulated stock prices by investing in derivatives on stocks they held. During the trial, prosecutors described Arkeogos's business as a "house of cards." Andrew Thomas, a U.S. federal prosecutor, emphasized in his closing argument to the jury, "By 2021, the defendant's lies and manipulations involved about 12 companies and half of Wall Street in a $100 billion scam, which collapsed within days."

The defendants have claimed innocence, arguing that their actions were merely typical leveraged investment techniques on Wall Street and that "no wrongdoing occurred during the investment process." Barry Berk, Hwang's attorney, argued to the jury that the prosecution criminalized the defendant's aggressive but legal trading methods. Mary Mulligan, attorney for CFO Halligan, stated, "We plan to appeal and believe our client will be acquitted."

Major foreign media including the NYT reported that the defendants could face up to 20 years in prison for each charge, noting that "Hwang could spend the rest of his life in prison." Judge Alvin Hellerstein, who presided over the case, is scheduled to hold the sentencing hearing on October 28.

This content was produced with the assistance of AI translation services.