The lawyer for Archegos Capital Management founder Bill Hwang made his final pitch to a jury poised to start deliberating his fate, arguing that the U.S. government’s fraud and market-manipulation case over the meltdown of the prolific investor’s family office “makes no sense.”
During an eight-week trial, Hwang was accused of being the mastermind of a scheme that ensnared half of Wall Street and cost banks $10 billion after he artificially jacked up stock prices. But in closing arguments Monday, his defense team said he was only an aggressive trader who invested in companies he truly believed in.
“The whole theory of their case makes no sense” because prosecutors failed to show during weeks of testimony by government witnesses how Hwang planned to realize a windfall from the alleged scheme, his lawyer, Barry Berke, told the jury. “It literally makes no sense.”
Hwang’s defense is that Archegos experienced a black-swan event — a perfect storm of market conditions that led to the collapse of his family office and an inability to meet billions in margin calls. Former Archegos CFO Patrick Halligan is also on trial after pleading not guilty to fraud and racketeering conspiracy.
On Tuesday morning, U.S. District Judge Alvin Hellerstein is expected to take about two hours delivering his instructions to the jury before it begins deliberations.
It will mark the end of a trial that has captivated Wall Street and forced many to revisit the 2021 implosion of Archegos, which reverberated across markets and obliterated Hwang’s $36 billion personal fortune.
Prosecutors claim Hwang engaged in manipulative trading to artificially inflate stock prices and lied to counterparties, or directed others to, so they’d increase Archegos’ credit limits and fuel a vicious trading cycle. Hwang’s use of swaps hid the true extent of his investments and allowed him to build up huge positions in companies including ViacomCBS and Discovery.