In a landmark case that has sent ripples through the financial industry, Bill Hwang, the founder of Archegos Capital Management, has been sentenced to 18 years in federal prison. The verdict was delivered in Manhattan federal court after Hwang was convicted of securities and market manipulation fraud—a scheme that slashed billions from the balance sheets of major global banks.

In court, as he faced Judge Alvin K. Hellerstein, Hwang expressed remorse over the downfall of Archegos, which occurred more than three years ago. Despite the judge not concluding the sentencing hearing, he announced the length of the prison term, citing the staggering impact of the fraud. It is reported that up to nine financial institutions suffered losses exceeding nine billion dollars due to Hwang’s deceptive practices.

During the high-profile trial held in July, prosecutors presented a compelling case against Hwang and his accomplices. They charged that Hwang’s deceptive tactics had artificially inflated the value of nearly a dozen stocks. This artificial escalation inevitably led to a dramatic collapse in March 2021, obliterating over 100 billion dollars in market value while bringing Hwang’s once-prominent firm to its knees.

Hwang was found guilty of 10 criminal charges, though acquitted of one particular charge concerning market manipulation. The court deemed him culpable on six separate counts, reflecting the breadth and depth of his fraudulent activities.

Prosecutors unveiled a saga of deception, where Hwang was accused of lying to secure vast sums of capital. By deceiving banks into providing billions of dollars, Hwang expanded his New York-based investment firm's portfolio from a reasonable 10 billion dollars to a colossal 160 billion dollars.

At the onset of Hwang's trial, Assistant US Attorney Alexandra Rothman illustrated the pyroclastic ambition that drove Hwang. Already a billionaire, Hwang envisioned himself as a Wall Street legend, concocting an elaborate scheme involving derivative trades that secretly amassed extensive positions in selective companies.

A centerpiece of the indictment highlighted Archegos’s manipulation of securities that escaped public disclosure requirements. This lack of transparency allowed Hwang and his firm to dominate trade and ownership in several companies' stocks unbeknownst to the investment public. Notably, Archegos at one point secretly controlled over half of ViacomCBS’s shares, a revelation that stunned the market.

However, the risky gambits turned the firm's portfolio into a precarious tower, swaying violently with any fluctuations in a select few stock prices. This house of cards collapsed when margin calls in late March 2021 annihilated more than 100 billion dollars in market value, all within a matter of days.

The saga of Archegos Capital Management and its founder Bill Hwang is a sobering tale of unchecked ambition and systemic risk, underscoring the importance of regulatory vigilance and ethical conduct in finance. As the financial world reflects on these events, the impact of Hwang’s actions will serve as a cautionary tale for years to come.