By Matthew Russell Lee, Patreon Substack
SDNY COURTHOUSE, Nov 20 – In the wake of the Archegos meltdown, the other shoe dropped on April 27, when the US Attorney for the SDNY unsealed and indictment charging Bill Hwang Patrick Halligan, Archegos’s CFO with racketeering conspiracy, securities fraud, and wire fraud offenses.
Inner City Press went to the SDNY press conference to ask, What about Credit Suisse and Nomura and people in those banks? What about the massive family office loophope to the Investment Advisors Act of 1940? This has come up in the OneCoin fraud case, on which the Office used perjured testimony and now agrees to delay after delay.
Damian William referred obliquely to Hwang doing it in the dark, but otherwise the issue - which is addressed by a pending bill in Congress - did not come up. Nor did Lisa Monaco, present in New York for the presser, address it.
On June 1, newly assigned District Judge Alvin K. Hellerstein held a conference in the case. Inner City Press attended and live tweet it here (and asked defense counsel a question later, here). Thread here.
And after, stand-up here, short Q&A here.
On June 20, 2023 Judge Hellerstein pushed the trial back: "Trial in the above-captioned criminal matter, by request of all parties, is adjourned from January 9, 2024 to February 20, 2024 at 10:00 a.m., in Courtroom 14D. The Final Pretrial Conference will be held on February 14, 2024 at 2:30 p.m. Time is excluded in the interest of justice from January 9, 2024 to February 20, 2024 pursuant to 18 U.S.C. § 3161. SO ORDERED (Signed by Judge Alvin K. Hellerstein on 6/20/2023)."
On July 27, Hwang wrote in seeking approval of subpoenas to Goldman Sachs, Morgan Stanley, Bank of Montreal, Credit Suisse, UBS, Nomura, MUFG, Mizuho, Macquarie, Jeffries and Deutsche Bank, to show he did not "use his lawfully executed swaps to artificially impact the prices of the underlying stocks."
Jump cut to November 14, 2023 when Judge Hellerstein held an oral argument on the subpoena requests. Inner City Press attended, in mask, and tweeted, threadette:
Hwang is here at defense table, with COVID mask and foyr lawyers at table, one behind.
Judge Hellerstein: Manipulation for manipulation is meaningless. How was it intended to make money? When? There are many different ways to hedge. I'd like to see them narrowed
Berke: Your Honor, you've done a lot of cases, but this is the 1st one in which DOJ is charging manipulation of swaps
Judge: It's hard to defend against manipulation. Mr Berke deserves a discussion. US v Nixon provides the boundary.
Berke: Thank you
And well he might say that - it seemed the defense won this round. He mocked what he called the prosecution's theory of "pump and brag," that Hwang did it to brag he'd built a family office into a major firm.
On January 3, 2024, still mostly masked, Judge Hellerstein said the proposed experts are qualified, that sufficient notice is the issue. He said he will follow Judge Jed Rakoff's decision in US v. Mrabet, which Inner City Press also covered. At the end Judge Hellerstein said, with a laugh, Don't settle this case, I want to try it.
More details on Substack here
On May 1, 2024, the US Attorney's Office wrote in to specify that at trial they intend to put forward evidence about Archegos' predecessor Tiger Asia, including that the SEC banned Hwang from acting, among other things, as an investment adviser.
On May 6, Halligan's counsel wrote in that the evidence should not be admitted at trial, as little of it involves Halligan but he would be prejudiced by it.
On May 15 in the trial, Mr. Marks of Operations testified about reports only to Bill and Patrick, then Mr. Jones about flying from Dallas amid the meltdown. Thread here
On May 21, the US insisted that evidence of Hwang's "decision not to reimburse employees for lost deferred compensation" should remain in evidence before the jury."
Full letter on Patreon here.
On May 22, Inner City Press live tweeted cross examination of cooperator Becker, here. In the midst of it, an announcement by Judge Hellerstein of the birth of a baby, and applause in the courtroom (it's in the thread).
On May 23, Becker continued - from the thread:
Becker is asked about his message, "Whatevs, we'll just roll with it."
Counsel: Turning to your lost vacation days, Mr. Becker, you felt you had never worked harder than at Archegos, isn't that true? Becker: Yes.
Counsel: You had 3 weeks of vacation - couldn't carry it over and you were angry, right? Becker: Correct.
Halligan's lawyer: You didn't want Mr. Halligan involved in your project, did you? He called you careless-
Judge Hellerstein: Haven't we gone over this? It's done. Finished. Halligan's lawyer: You felt he didn't show appreciation Judge Hellerstein: Move on
Now re-direct: AUSA: Mr. Becker, Mr. Berke didn't show you this sheet, did he? Objection! Overruled. Becker: He didn't.
AUSA: You were asked some questions about conversations with Mr. Halligan. Why was it so frantic? Let me off this March 23 chat, 3745
Judge Hellerstein: Jurors, have a good weekend. [Jurors leave] Defense: Can we discuss schedule for next week? Judge: Tues and Wed 10 to 5. Can't say about Thursday. Government, how are we doing?
AUSA: We expected Becker 1 week, on schedule
Judge Hellerstein: Done in 2 weeks? AUSA: That's aggressive. Adjourned.
On May 28, the US Attorney's Office filed a letter seeking permission in advance to ask "what if you had known" questions of the type blessed by the 2d Circuit in US v. Cuti (2013), starting with Bank of Montreal's Joseph Boccuzzi on May 29. Letter on Patreon here
May 29 ended with a dispute about a government chart, long and short positions, which Hwang's lawyer Berke called argumentative, from the thread
On June 5, Inner City Press live tweeted, thread
On June 6, government expert testified about, among other things, dark pools, thread
On June 10, cooperation William Tomita began on the stand, from thread:
Tomita: Yes. They were traders, executing the trades on behalf of Bill. Bill would yell at me, Don't list to Andy, you answer to me
On June 11, Tomita continues. From thread:
On June 14 to start the trial day after a two day hiatus, counsel for Halligan complained about Bank of America witness / issue, thread.
On June 17, Tomita still on the stand, thread
Scheduling: In US v. Hwang (Archegos) case, Judge Hellerstein was just asked about when closing arguments will / can be. He said he'll tell the jury they will *try* to finish before July 1 - one juror has to end then, or be replaced - but closings on July 8 were also floated
On June 18, Tomita was on the cross, thread
On June 20, after Juneteenth, Tomita was on cross, thread
On June 21, yet more Tomita cross, Inner City Press was there, from the thread
On June 24, Tomita being crossed by Halligan's lawyer, from the thread
On June 25 things descended into fight about summary charts versus demonstratives, from the thread:
OK - now Tuesday in US v. Hwang of Archegos, with prosecution responding to objection by co-defendant Halligan's counsel.
AUSA: The chart now shows March 2021- Judge: My suggestion is to put it down by month. Halligan's lawyer: The blue bars identify the problem; they don't solve it. The left territory IDs five data points. The right territory represents a shorter period of time.
Judge: What don't you call it a cash projection, not an estimate? AUSA: Fine, your Honor, we'll change that. Defense: This is not really a summary chart. It's more of a demonstrative, that they should only be allowed to use in summation.
On June 26, the US rested, and defense witness took the stand. From the thread.
On June 27, Judge Hellerstein said that the charge conference will be July 1 - and closings July 8. Thread
On June 28, a defense expert was cross examined.
On July 1, from the charging conference, from the thread.
On July 8, the closings, from the Inner City Press thread
On July 9, the jury charge and then, amid deliberations, two jury notes, from the thread
On July 10, after Inner City Press monitored the courtroom and lawyers' answers to jury questions, at 4 pm, live tweeted the (guilty) verdicts, thread:
Now in US v. Hwang courtroom, Hwang has moved next to his lawyer Berke. All rise! Judge Hellerstein: We have a note. It reads, "The jury has reached a verdict." Call them out. Jury coming in! [Hwang has his hands folded in front of him]
Judge Hellerstein: Ms. Jones, please take attendance. [12 names are read out, all say present] Judge Hellerstein: Ms. Jones, please take the verdict from Ms. Pope for my inspection.
Judge Hellerstein: Ms. Jones, please return it to Ms. Pope and ask her to sign it, as foreperson. Please date it. Today's the 10th and the time, 4:34.
Ms. Jones, take the verdict please. Ms Jones: how do you find Defendant Hwang? Foreperson (softly) Guilty
Judge Hellerstein: For both Mr. Hwang and Mr. Halligan, poll the jury. Ms. Jones: Count 1, RICO as to Hwang, guilty. Is that your verdict? [15 times yes] Ms. Jones: Count 1, RICO as to Halligan, guilty. Is that your verdict? 15 Yes
Count 3, Market Manipulation, Viacom CBS - Guilty. Is that your verdict? All say Yes - 15
Count 4, Market Manipulation, Discover Communication, Guilty. 15 Yes.
[US v. Hwang and Halligan] Count 5: Guilty. Count 6, GSX, Guilty. Count 7, IQI... Hwang, NOT Guilty. 15 confirm. Count 8, Guilty. 15 yes. Count 9, Guilty; 15 yes. Count 10, Securities fraud, counterparties. Hwang, Guilty. 15 yes.
[Verdict sheet will go on ECF, we'll screenshot it] Judge Hellerstein: Jurors I discharge you - you even fought to keep your place on the jury. [Jurors leave] Judge Hellerstein: It's been a difficult trial. Motions due in 14 days.
Hwang's lawyer Berke: Due to some of the issues in the case could we have November? Judge Hellerstein: October 22. Berke: We may seek an adjournment. How about December? Judge Hellerstein: Too long. October 22 at 10 am.
Judge Hellerstein: Bail? AUSA Thomas: The government has no application [not asking for remand or any changes]
Judge Hellerstein: Sentencing October 28, now, a Monday, at 2:30 pm. Adjourned
It was delayed. On November 8, Hwang's lawyers wrote in asking for a "non-custodial" sentence in a 70 page memo, citing among other things age and health.
On November 15 the US Attorney's Office wrote in asking for not "less than 21 years, arguing among other things that Hwangs's charitable work does not justify a sentence of less.
On November 20 Hwang was sentenced to 18 years. Inner City Press was there. From the thread:
Assistant US Attorney: Mr. Hwang's conduct was pervasive, the corruption of an entire financial firm for his own ends. That is not something the Court finds all the time.
AUSA: He inflated stock prices, he benefited from his employees lying up and down Wall Street. This is not a one-off fraud. It made use of an entity. The jury found Mr. Hwang participated in a racketeering conspiracy
AUSA: Mr. Hwang was not corruption the garbage [pick up] industry, but a financial firm. He is a recidivist - this is uncommon. His previous firm Tiger Asia pled guilty. The Government seeks 21 years in prison, for the lack of contrition, despite his age
Hwang's lawyer: I want to respond to some things that Mr. Thomas has just said. It is unfair to say he is not contrite. It is his right to have a trial and then appeal. It is inappropriate. Judge Hellerstein: There is an intensity of denial
Hwang's lawyer: It is our ethical obligation to engage in zealous advocacy, so I am offended. Judge Hellerstein: Let's hear your argument Hwang's lawyer: Mr. Hwang was not adjudicated of any wrongdoing, the plea was by Tiger Asia. There are many reasons to settle
Hwang's lawyer: Bill's money is gone. He lost it all. He was born in Korea, the son of a pastor, missionary work in Mexico. Service is in his DNA. As a teenager he was focused on service. I'm raising a 15 year old, it's the most self-serving age [laughter in court
Hwang's lawyer: Bill came to the US at 19, his father got a job as a pastor in Las Vegas. 2 months here, his father died. His mother did not work. Bill worked at McDonalds, going for his GED at night. They moved to LA, with $3000 to their name - he found a shed
Judge Hellerstein: How many homes does he have? Hwang's lawyer: He owns his home in NJ, and rents in NY Judge Hellerstein: In the most expensive area, Hudson Yards... To talk about modesty... Hwang's lawyer: All of us here in this courtroom are privileged
Hwang's lawyer: Michael Milken was not sentenced to 21 years, but 10 years, at a time there was probation. Judge Hellerstein: And Judge Kaplan on Bankman -Fried? Hwang's lawyer: He got 20 years, I think
They're back. Hwang's lawyer: If he is sentenced to more than 11 and a half years, he cannot be in a low security facility and will be 140% more likely to be assaulted. Bill Hwang: I feel terrible for what happened in Archegos... I have learned so many lessons.
Bill Hwang: I grew up in Korea. My parents showed me how to love and be loved. My wife of 33 years, Becky, love me through good and tough times. Since I came to NY 33 years ago we have been learning today, serving together. I have wonderful 2 daughters
Bill Hwang: I am so blessed. I was difficult and heartwarming to know my family and friends took the time to write about me and the work Becky and I have done together. I am sorry they had to do it. I am grateful to you and to our God. Thank you
Hwang is sentenced to 18 years in prison.
Back on March 21, 2023 Judge Hellerstein held an hour and a half proceeding in which he denied more than a dozen motions by Team Hwang. Inner City Press was there and live tweeted, thread here.
More including on Halligan on Substack here.
Later - after re-up of book and talk to NYU Journalism School, here and here - in the SDNY Magistrate a defendant was detained until trial, charged as a felon in possession. We'll have more, much more, on this.
The case is US v. Hwang, 22-cr-240 (Hellerstein)
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