A jury in federal court in Manhattan on Wednesday found the investor Bill Hwang guilty on charges arising from the collapse of Archegos Capital Management, which led to roughly $10 billion in losses for a handful of big Wall Street banks.
The 12-person jury deliberated for nearly two days after a two-month trial that featured testimony from 21 prosecution witnesses. Two key witnesses were former employees of Archegos, which Mr. Hwang had set up in 2013 as a giant family office that traded like a hedge fund but without much regulatory oversight.
In all, Mr. Hwang, 60, was charged with 11 counts of securities fraud, wire fraud, conspiracy, racketeering and market manipulation. The jury found him guilty on 10 of those charges and found him not guilty on one of the seven counts of market manipulation.
Mr. Hwang, who was seated and wearing a dark suit when the foreperson read the verdict, could spend the rest of his life in a federal prison.
Damian Williams, the U.S. attorney for the Southern District of New York, whose office brought the case, was in the courtroom for the reading of the verdict.
Also convicted was Patrick Halligan, the former chief financial officer of Archegos, who was convicted on all three counts against him: conspiracy, securities fraud and wire fraud.
Federal prosecutors argued that Mr. Hwang and some of his employees had misled the banks about the big positions that Archegos amassed in about a dozen stocks. They did so, prosecutors said, by relying on sophisticated derivatives and loans provided by those Wall Street institutions.
The sudden collapse in 2021 of Archegos — which managed $36 billion in Mr. Hwang’s family money — wiped out most of his personal fortune in addition to causing the steep losses for the banks that had facilitated his firm’s trading. The trial painted Mr. Hwang as something of a freewheeling and reckless trader. Prosecutors claimed he had engaged in a “pump and brag scheme” — a strategy designed to substantially increase the firm’s stock holdings by misrepresenting Mr. Hwang as an extremely wealthy person.
Mr. Hwang’s defense team argued that prosecutors were seeking to criminalize high-risk and aggressive trading.
The high-profile white collar trial also revealed how Wall Street banks were more than eager to lend him billions of dollars in return for hefty fees.
The trial was also closely followed by some in the Christian community. The Grace and Mercy Foundation, a charitable organization founded by Mr. Hwang, has sponsored Bible readings and religious book sales and given tens of millions of dollars to Christian organizations.
On some days before the jury entered the courtroom, Mr. Hwang could be seen standing and reading silently from a religious book.
The publication Christian Today has periodically covered the trial, which has focused almost exclusively on the world of finance. It’s unclear what the future holds for Grace and Mercy.
Both Mr. Hwang, whose legal name is Sung Kook Hwang, and Mr. Halligan chose not to testify. Their defense strategy was to aggressively cross-examine prosecution witnesses, particularly two former Archegos employees who pleaded guilty and cooperated with the authorities. Mr. Hwang called just two witnesses of his own.
The trial’s judge, Alvin K. Hellerstein, set sentencing for both men for Oct. 28.
This is a developing story. Check back for updates.