He was a successful millionaire, he lost 20 million in two days and now faces 200 years in prison

In the world of finance there is a thin line between what is legal and what is prohibited. Although it feeds on speculation and plays with fictitious prices, sometimes investors feed irrational purchases to their clients with inside information and lead them to make harmful decisions seeking personal benefit.

Sung Kook Bill Hwang is the founder of Archegosthe investment fund whose fall caused an earthquake on Wall Street. Was convicted of fraud, market manipulation and a total of 10 crimes, of the 11 he faces. It is estimated that for each crime he will receive 20 years in prison, which makes up a total of 200 years in prison.

What is the story of Bill Hwang?

Bill Hwang was born in South Korea, but He emigrated with his family to the United States at a very young age.. He graduated with a degree in business administration from the University of California. He worked as an analyst at Tiger Management and then founded Tiger Asia Management in 2001, with the goal of investing in Asian companies.

Since then he made strong financial bets. Large amounts of carefully selected stocks. Most of his bets were on rising quotes. In 2012 the US Securities and Exchange Commission declared it guilty of enriching himself through manipulation and insider trading of two shares of Chinese banks. They sanctioned him with 60 million dollars.

In any case, his company was around 10 billion dollars in profits. A year later he founded Archegos Capital Management with $200 million of his own pocket. From then on it had great growth based on leverage and was accompanied by a winning streak. In 2016, Netflix Inc brought it around $1 billion in profits.

Bill Hwang guilty of fraud

But the fact of Saving your entire fortune in stock stocks would play a trick on you. They were liquid capital that could have been collected and withdrawn for life. In 2021, one of its largest investments, ViacomCBS announced a sale of shares and debt for $3 billion as it was unable to compete with streaming platforms.

Its shares fell 9% on a Monday and continued to decline up to 23% on that Wednesday, March 24. No one knew what to do with their shares because selling them would cause an even bigger drop. At a meeting of creditors they asked Bill to sell them but he refused so as not to lose money.

Analysts estimate that Bill took out loans of 85 million for every 20 million he had in his possession. So he invested 100 and kept 5 for himself. But his stock fell so quickly that he had nothing left.

According to prosecutors, Hwang inflated Archegos’ value to $36 billionwhich was its highest point. With that money earned, he invested in inflating the shares of the companies he had bought, such as Viacom. One of his advisors confessed to the court that Hwang asked him to buy Archegos shares at expensive prices to inflate their value.

He also required his employees to lie about the company’s investments. He told his creditors that his portfolio was made up of large technology companies with good liquidity such as Amazon or Apple, but in reality he led positions in declining or inflated companies such as Viacom.