John McCrank

NEW YORK (Reuters), Archegos Capital Management founder Bill Hwang was charged Wednesday by federal prosecutors with 11 criminal offenses and Patrick Halligan the former chief finance officer at Archegos Capital Management with three charges related to Archegos’ collapse a year earlier.

Hwang and Halligan were found not guilty by the Manhattan federal court.

What are THEY CONVINCED OF DOING?

Hwang, Halligan were accused by authorities of lying to banks in an effort to improve Archegos credit lines. They also used the borrowed money for manipulation of stock prices at companies belonging to the $36 Billion family office portfolio. This included Viacom (NASDAQ:), Discovery (NASDAQ;) and Tencent Music Entertainment.

Global banks suffered a loss of around $10 billion when Archegos fell in March 2021.

WHAT ARE THE SPECIFIC COSTS?

Hwang is facing charges for racketeering and securities fraud. He also faces wire fraud, securities fraud of counterparties, and securities fraud. Halligan was charged with racketeering as well wire fraud and securitiesfrau of counterparties.

What do RACKETEERING and MARKET MANIPULATION INVOLVE?

According to the Department of Justice, Hwang and Halligan were found guilty of racketeering conspiracy by setting up an illegal scheme of profit.

Hwang is charged with market manipulation. He was accused of directing or engaging in transactions in securities and securities based swaps, in an attempt to lower or raise their prices and to induce others to buy those securities.

What do the FRAUD CHARGES CONTAIN?

Archegos’ founder was accused of engaging in securities fraud to manipulate the prices and build positions in many stocks.

Both Hwang, Halligan and others were charged with securities fraud. They were accused of lying to banks regarding Archegos assets to get more loans. This allowed them to fund larger positions, and keep the prices high.

They were also accused of wire fraud of their counterparts. Wire fraud can refer to online fraud and fraud using telecommunications network.

The charges allege that they used these methods to defraud Archegos’ trading counterparties.