The jury deliberated for two days before delivering a verdict, convicting Hwang on 10 of the 11 criminal counts he faced, and Halligan on all three counts. Both defendants, who pleaded not guilty to charges including racketeering conspiracy, fraud, and market manipulation, await sentencing scheduled for October 28 under the supervision of United States District Judge Alvin Hellerstein.
The collapse of Archegos triggered significant financial turmoil, causing approximately $10 billion in losses for global banks and over $100 billion in shareholder losses across its portfolio companies, according to prosecutors. Hwang was accused of misleading banks to secure billions of dollars in loans, which were then used to artificially inflate stock prices through derivative positions.
Prosecutors argued that Hwang's actions not only harmed financial markets but also inflicted substantial losses on banks, market participants, and Archegos employees. They portrayed Hwang's maneuvers as a sophisticated scheme that misled banks about the true extent of Archegos's derivative holdings, leading to a dramatic collapse when stock prices declined in early 2021.
The trial featured testimony from former Archegos executives who had already pleaded guilty to related charges, detailing Hwang's strategy of accumulating significant but undisclosed stakes in various companies. Prosecutors emphasized the scale of Archegos's operations, which allegedly exceeded the holdings of the companies' largest investors at its peak.
Hwang's defense team countered by characterizing the prosecution's case as an overreach, arguing that the trading strategies employed by Archegos were aggressive but legal. They suggested that the charges criminalized legitimate market practices rather than addressing unlawful conduct.
The outcome of the trial underscores ongoing regulatory scrutiny into financial markets and the accountability of individuals who wield substantial influence over them. As Hwang and Halligan await sentencing, the repercussions of their convictions are expected to reverberate throughout the financial industry, shaping future regulations and enforcement measures aimed at preventing similar incidents of market manipulation.
