Supporters of Christian investor and philanthropist Bill Hwang closed their eyes and prayed in federal court as they waited for a verdict on a case accusing him of massive Wall Street fraud. Hwang himself, serene throughout the proceedings, read a Bible devotional and took notes in the margins—a practice he had done throughout the trial—as he awaited the jury’s ruling.
On Wednesday, a jury found Hwang, at one time one of the wealthiest evangelicals in the US, guilty of manipulating the stock market and defrauding banks. It is one of the biggest cases of Wall Street fraud in terms of dollar amount, with banks losing $10 billion after he and his firm lied to them.
It is the crashing conclusion of a unique institution: Hwang’s Archegos Capital Management, a Christian investment firm that was named for a Greek word used to describe Christ as the “author” of our salvation (Heb. 2:10) and the “prince” of life (Acts 3:15). While Hwang’s defense team had argued that his aggressive trading at Archegos was within the bounds of normal Wall Street practice, the jury found he and his team were guilty of defrauding banks of billions and artificially pumping up stock prices.
The jury found him guilty of 10 of 11 counts. He was guilty of racketeering, securities fraud, market manipulation, and wire fraud. He was found not guilty on one count of market manipulation regarding one particular stock.
When Archegos collapsed in March 2021, the firm lost $36 billion, banks lending to Archegos lost $10 billion, and about $100 billion in market value disappeared.
Hwang’s Christian faith was woven into the long federal trial, featuring witnesses from Hwang’s Christian foundation Grace and Mercy as well as references to his Christian philanthropy. The jury heard the case before a courtroom that was consistently full of Hwang’s Christian supporters in New York—a feat of endurance over eight weeks when no phones were allowed in the courtroom and the technical subject matter was making even the jury sleepy.
Evidence in the trial alluded to the shared faith at the firm.
As the fund’s collapse was beginning in March 2021, Andy Mills, top brass at Archegos and a former president of The King’s College, a Christian college in New York, sent an email to another Archegos leader. “Pray that the markets rise tomorrow,” he wrote, according to documents from the prosecution.
“The point at which your business plan requires divine intervention is the point at which you have a solvency problem,” said prosecutor Andrew Mark Thomas in closing arguments, according to Bloomberg.
The defense initially intended to call Mills as a witness, but he did not end up testifying.
In the trial, the defense tried to refer to Hwang’s faith and his philanthropy as a way of highlighting his humble non–Wall Street ways, but the judge limited references to his personal devotion as irrelevant to a case of market manipulation.
The government’s case was that Archegos borrowed billions from banks on false pretenses and used that money to buy up large positions in a few companies, pumping up the prices artificially. The defense argued that Hwang genuinely believed in the companies he invested billions in, and that he wasn’t trying to defraud the banks but simply pursuing an aggressive trading strategy.
On Wednesday, as the jury members filed into court with their verdict, US Attorney Damian Williams slipped into the back of the courtroom—showing how seriously the Department of Justice took this case.
The jury in this case did not know this, but Hwang’s previous hedge fund, Tiger Asia, had pleaded guilty to a fraud charge in 2012. Tiger Asia was converted to Archegos in 2013.
The government’s case against Hwang centered on testimony from star witnesses Scott Becker and William Tomita, both former Hwang deputies at Archegos who had pleaded guilty and cooperated with prosecutors. Both Tomita and Becker said that when Archegos collapsed, Hwang offered them roles at his $528 million Grace and Mercy Foundation, which supports Christian ministries around the world.
Archegos and Grace and Mercy shared the same floor of office space—with a conference room to host regular lunchtime public reading of Scripture, a Hwang initiative. Some Archegos employees worked at both entities doing investments.
Grace and Mercy faces a lawsuit related to Archegos’s collapse, but it is not affected by this ruling. It has been operating normally since Archegos closed.
Another witness for the prosecution was Fernanda Piedra, a top Archegos employee who became the compliance officer for Grace and Mercy. The prosecution asked her to testify about the fund’s final days.
Tomita’s testimony undercut the defense’s image of Hwang as a humble Christian investor. He portrayed Hwang as an angry boss, yelling at traders if they took bathroom breaks. He testified that Hwang had lied to the banks that Archegos was borrowing billions from.
Prosecutors showed the jury Bloomberg Terminal messages, recorded phone calls, and charts upon charts depicting the links between Archegos’s buying practices and the movement of particular stock prices. When Archegos was on a buying spree of GSX, a Chinese educational technology company, in 2020 and 2021, the stock reached a price of more than $100 a share. It is now trading at $5 a share.
“Throughout my training at the company, I had been taught by Bill when necessary to give misleading pictures about the fund and its positions,” Tomita testified, according to Bloomberg.
Hwang, 60, faces the possibility of spending the rest of his life in prison and his sentencing is set for October 28. He will be free pending sentencing on a $100 million bond.
