Trial of Former Archegos Trader and Historic Stock Manipulator Bill Hwang
Better MarketsMay 06
Archegos Founder Bill Hwang Heads to Trial
Image copyright: Spencer Platt/Staff/Getty Images News via Getty Images
The Facts
Archegos Capital Management founder Sung Kook "Bill" Hwang's trial is slated to begin Wednesday with jury selection. Archegos, a family office that managed Hwang's assets, collapsed in March 2021.
Hwang, 60, faces 11 counts of racketeering, conspiracy, and fraud in a Manhattan court over his use of "total return swaps," volatile financial instruments Archegos allegedly used to invest in stocks without owning them.
The Spin
Narrative A
Hwang engaged in one of the most damaging market manipulation schemes in recent memory and must be held accountable for the billions of dollars he cost investors and financial institutions. By abusing risky financial instruments, Hwang's attorneys will argue that none of his trades were unlawful. However, his systematic market abuse constituted a willful market manipulation to deceive investors.
Narrative B
Though Bill Hwang didn't manage his positions especially ethically while running Archegos, he didn't commit any crimes. The government is trying to further punish him by pursuing novel market manipulation theories without precedent or legal standing. This trial could open the floodgates for prosecutors to punish all Wall Street firms and usher in arbitrary charges that aren't based on the letter of the law.
Nerd narrative
There's a 50% chance that the next great financial crisis in the US will occur by 2029, according to the Metaculus prediction community.