Archegos Capital Management’s Bill Hwang lost his bid to have charges against him dismissed as well as for a hearing over his claims that prosecutors improperly duped him into providing them with information used to indict him.
US District Judge Alvin Hellerstein in Manhattan ruled from the bench on Tuesday, rejecting entirely arguments by Hwang to dismiss racketeering conspiracy, fraud and market manipulation charges.
Hwang was arrested April 27 and charged with fraud over the collapse of Archegos, which at one point held market positions valued at US$160 billion ($213.88 billion), according to prosecutors. The implosion cost banks US$10 billion and contributed to the downward spiral at Credit Suisse Group AG.
Hwang claims he spent months in discussions with investigators who didn’t tell him when they decided he was a “target” of the probe. Instead, they falsely left open the possibility that he wouldn’t be charged, his lawyer said. Hwang and former Archegos Chief Financial Officer Patrick Halligan, who is also charged in the case, are scheduled to go on trial in January 2024. They have both pleaded not guilty.
Hwang had no idea he was a target even as a grand jury voted to return an indictment, which was filed under seal, his lawyer, Lawrence Lustberg, told the judge. Hwang and Halligan were arrested two days later.
Lustberg said he and Hwang spoke to prosecutors believing “that they were listening and that they were considering our arguments.”
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Assistant US Attorney Andrew Thomas called the misconduct claims “outrageous.”
Bid Rejected
Along with denying the defendants’ motions to dismiss the charges and request for a hearing to look into the government’s conduct, the judge also rejected their bid for an order requiring the government to provide additional details about its case against the two men at this stage of the case.
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Hwang faces 11 criminal counts. Halligan is charged, with Hwang, in the racketeering conspiracy count and faces one count each of securities fraud and wire fraud. His lawyer, Mary Mulligan, has said her client had nothing to do with trading at Archegos.
During the hearing, Hellerstein asked what prosecutors thought Hwang’s motivations were in trading that the government claims was criminal. Thomas, the prosecutor, said Hwang was pursuing “unimaginable wealth” and said he had “visions of grandeur,” imagining himself a “king of the universe.”
Hellerstein said he would follow up his in-court rulings with a written order and reserved the possibility that he could change his mind.
The case is US v. Hwang, 22-cr-00240, US District Court, Southern District of New York (Manhattan).
