Sung Kook “Bill” Hwang tried to trick all of Wall Street, a federal prosecutor told a Manhattan federal jury, as the trial on charges stemming from the 2021 collapse of Hwang’s $36 billion fund Archegos Capital Management began on Monday.
Prosecutors have alleged that Hwang andArchegoslied to Wall Street banks to secure billions of dollars of funding that they then used to inflate stock prices.
FormerArchegosChief Financial Officer Patrick Halligan, who is also on trial, enabled the scheme, they claim.
Archegos’ collapse caused more than $100 billion in shareholder losses at companies in its portfolio, harming investors who sold shares after their scheme collapsed, prosecutors also allege.
Hwang and Halligan have pleaded not guilty.
Assistant US Attorney Alexandra Rothman told the jury of 12 people that Hwang sought to become a Wall Street legend by pumping the value of his holdings through manipulative trading, turning Archegos into a criminal enterprise.
“Bill Hwang was a billionaire and yet he risked nearly everything because he wanted more: more money, more success, more power,” she said.
“To those in the know he was a great investor. He had it all. But it wasn’t enough,” Rothman added.
The case has been closely watched on Wall Street as a test of prosecutors’ ambitious market manipulation theory.
It is expected to shed light on the inner workings of banks’ dealings with profitable but risky clients.
Hwang’s attorney Barry Berke told jurors that his client staked his own cash on companies he believed in deeply, trading like he was prepared to lose it all.
“The reason he did it was because he had the courage of his convictions,” Berke said.
Halligan’s attorney Mary Mulligan said her client was not a risk taker, but a bean counter who saw the firm’s financial position as solid.
The banks Archegos traded with knew the risks and kept trading with the firm anyway to chase profits, Mulligan said.
Testimony in the trial, which could last up to eight weeks, will center on the implosion of Hwang’s lightly regulated family investment office Archegos, which prosecutors allege caused more than $100 billion in shareholder losses at companies in its portfolio.
The case is one of several brought by US Attorney Damian Williams alleging wrongdoing by powerful investors amid the wild market swings that occurred during the COVID-19 pandemic.
Prosecutors accuse Hwang of using financial contracts known as total return swaps to secretly amass outsize stakes in multiple companies without actually holding their stock.
His positions were so large they eclipsed that of the companies’ largest investors, driving up stock prices, prosecutors say. At its peak, they say, Archegos had $36 billion in assets and $160 billion of exposure to equities.
Falling stock prices in March 2021 triggered margin calls that Archegos was unable to meet. That, in turn, led some banks to dump the stocks backing his swaps, causing billions in combined losses for Archegos and banks including Morgan Stanley, Credit Suisse, now part of UBS, and Nomura Holdings.
Hwang and Halligan are charged with racketeering conspiracy. Hwang faces an additional 10 counts of fraud and market manipulation, and Halligan an additional two counts of fraud. Each count carries a maximum potential sentence of 20 years.
Hwang’s lawyers have described the case as the “most aggressive open market manipulation case ever” brought by prosecutors. Several attorneys told Reuters it may be a tough case for the government.
Archegos head trader William Tomita and Chief Risk Officer Scott Becker have pleaded guilty to related charges and are expected to testify at the trial. Some bank executives may also appear on the witness stand.
Gillian Anderson has warned homelessness is a growing problem in the UK – one that will only get worse if we enter a recession.
The award-winning actress, who is playing a woman facing homelessness along with her husband in her latest film, The Salt Path, told Sky News: “It’s interesting because I feel like it’s even changed in the UK in the last little while.”
Born in Chicago, and now living in London, she explained: “I’m used to seeing it so much in Vancouver and California and other areas that I spent time. You don’t often see it as much in the UK.”
Her co-star in the film, White Lotus actor Jason Isaacs, chips in: “You do now.”
“It’s now becoming more and more prevalent since COVID,” said Anderson, “and the current financial situation in the country and around the world.
“It’s a topic that I think will be more and more in the forefront of people’s minds, particularly if we end up going into a recession.”
Image: Gillian Anderson and Jason Isaacs in The Salt Path. Pic: Steve Tanner/Black Bear
The film is based on Raynor Winn’s 2018 memoir, which depicts her and her husband’s 630-mile trek along the Cornish, Devon and Dorset coastline, walking from Minehead, Somerset to Land’s End.
Written from her notes on the journey, The Salt Path went on to sell over a million copies worldwide and spent nearly two years in The Sunday Times bestseller list. Winn’s since written two more memoirs.
Isaacs, who plays her husband Moth Winn in the movie, told Sky News that Winn told him she “hopes [the film] makes people look at homeless people when they walk by in a different light, give them a second look and maybe talk to them”.
With record levels of homelessness in the UK, with a recent Financial Times analysis showing one in every 200 households in the UK is experiencing homelessness, the cost of living crisis is worsening an already serious problem.
Image: Pic: Steve Tanner/Black Bear
The film sees Ray and Winn let down by the system, first by the court which evicts them from their home, then by the council which tells them despite a terminal diagnosis they don’t qualify for emergency housing.
Following the loss of their family farm shortly after Moth’s shock terminal diagnosis with rare neurological condition Corticobasal Degeneration (CBD), the couple find solace in nature.
They set off with just a tent and two backpacks to walk the coastal path.
Isaacs says living in a transient way comes naturally to actors, admitting like his character, he too “lives out of a suitcase” and is “away on jobs often”.
Shot in 2023 across Somerset, Devon, Cornwall and Wales, Anderson says as a city-dweller, the locations had an impact on her.
Anderson reveals: “As I’ve gotten older, I have become more aware of nature than […] when I was younger, and certainly in filming this film and being outside and so much of nature being a third character, it did shift my thinking around it.”
Meanwhile, Isaacs says he discovered a “third character” leading the film just the day before our interview, when speaking to Winn on the phone.
Isaacs says the author told him: “I feel like there’s three characters in the film,” going on, “I thought she was going to say nature, but she said, ‘No, that path'”.
Isaacs elaborates: “Not just nature, but that path where the various biblical landscapes you get and the animals, they matter.
“The things that happen on that path were a huge part of their own personal story and hopefully the audience’s journey as well.”
The Salt Path comes to UK cinemas on Friday 30 May.
Sir Keir Starmer could decide to lift the two-child benefit cap in the autumn budget, amid further pressure from Nigel Farage to appeal to traditional Labour voters.
The Reform leader will use a speech this week to commit his party to scrapping the two-child cap, as well as reinstating winter fuel payments in full.
There are now mounting suggestions an easing of the controversial benefit restriction may be unveiled when the chancellor delivers the budget later this year.
According to The Observer, Sir Keir told cabinet ministers he wanted to axe the measure – and asked the Treasury to look for ways to fund the move.
The Financial Times reported it may be done by restoring the benefit to all pensioners, with the cash needed being clawed back from the wealthy through the tax system.
The payment was taken from more than 10 million pensioners this winter after it became means-tested, and its unpopularity was a big factor in Labour’s battering at recent elections.
Before Wednesday’s PMQs, the prime minister and chancellor had insisted there would be no U-turn.
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Will winter fuel U-turn happen?
Many Labour MPs have called for the government to do more to help the poorest in society, amid mounting concern over the impact of wider benefit reforms.
Former prime minister Gordon Brown this week told Sky News the two-child cap was “pretty discriminatory” and could be scrapped by raising money through a tax on the gambling industry.
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Brown questioned over winter fuel U-turn
Mr Farage, who believes Reform UK can win the next election, will this week accuse Sir Keir of being “out of touch with working people”.
In a speech first reported by The Sunday Telegraph, he is expected to say: “It’s going to be these very same working people that will vote Reform at the next election and kick Labour out of government.”
Sir Alan Bates has accused the government of presiding over a “quasi kangaroo court” for Post Office compensation.
Writing in The Sunday Times, the campaigner, who led a years-long effort for justice for sub-postmasters, revealed he had been given a “take it or leave it” offer that was less than half of his original claim.
“The sub-postmaster compensation schemes have been turned into quasi-kangaroo courts in which the Department for Business and Trade sits in judgement of the claims and alters the goal posts as and when it chooses,” he said.
“Claims are, and have been, knocked back on the basis that legally you would not be able to make them, or that the parameters of the scheme do not extend to certain items.”
More than 900 sub-postmasters were prosecuted between 1999 and 2015 after faulty Horizon accounting software made it look as if money was missing from their accounts.
Many are still waiting for compensation despite the previous government saying those who had their convictions quashed were eligible for £600,000 payouts.
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‘It still gives me nightmares’
After the Post Office terminated his contract over a false shortfall in 2003, Sir Alan began seeking out other sub-postmasters and eventually took the Post Office to court.
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A group litigation order (GLO) scheme was set up to achieve redress for 555 claimants who took the Post Office to the High Court between 2017 and 2019.
Sir Alan, who was portrayed by actor Toby Jones in ITV drama Mr Bates Vs The Post Office, has called for an independent body to be created to deliver compensation.
He added that promises the compensation schemes would be “non-legalistic” had turned out to be “worthless”.
It is understood around 80% of postmasters in Sir Alan’s group have accepted a full and final redress, or been paid most of their offer.
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‘Lives were destroyed’
A Department for Business and Trade spokesperson told Sky News: “We pay tribute to all the postmasters who’ve suffered from this scandal, including Sir Alan for his tireless campaign for justice, and we have quadrupled the total amount paid to postmasters since entering government.
“We recognise there will be an absence of evidence given the length of time which has passed, and we therefore aim to give the benefit of the doubt to postmasters as far as possible.
“Anyone unhappy with their offer can have their case reviewed by a panel of experts, which is independent of the government.”