Archegos founder seeks home confinement as part of prison sentence

Investing.com -- Bill Hwang, founder of Archegos Capital Management, is set to return to court to argue for a reduction in his 18-year prison sentence. The request is for a third of his sentence to be spent in home confinement.

The hearing is scheduled for Thursday in New York. Barry Berke, Hwang's attorney, plans to ask US District Judge Alvin Hellerstein to modify his client's sentence to 11 1/2 years in prison and 6 1/2 years in home confinement. Berke is anticipated to argue that the change is justified due to health concerns and the requirement that a longer prison term would be served in a higher-security facility housing violent offenders.

Hwang's case has intrigued Wall Street. In July, he was convicted of devising a scheme to defraud bank counterparties by procuring billions of dollars in trading capacity for Archegos. This was used to increase the value of its holdings until the firm collapsed in March 2021, causing banks to lose approximately $10 billion in trades with Archegos.

Judge Hellerstein's readiness to reassess Hwang's sentence is an unexpected development in the trial. The judge could make a ruling from the bench on whether to grant Hwang's request.

Federal prosecutors argue that the law does not allow Hwang's sentence to be split so that he can spend 6 1/2 years in home confinement. They also argue that Hwang is likely to be moved to a minimum-security facility run by the US Bureau of Prisons after roughly four years and is expected to be released to a halfway house after 10 years. They contend that reducing his prison time would be unjust to others convicted of comparable crimes.

Prosecutors stated that it would send the wrong message if wealthy stock manipulators like Hwang were allowed a lower sentence to avoid the Bureau of Prisons classification system, which is applied equally to all inmates.

Irrespective of the court's decision, Hwang is not expected to enter prison soon. Judge Hellerstein has permitted him to remain free while awaiting an appeal that could take a year or more.

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Source: Investing.com