(Bloomberg) -- Bill Hwang’s 18-year prison sentence could be reduced to 11 1/2 years after his lawyer argued the punishment was too harsh for the 60-year old Archegos Capital Management founder.
At a hearing in Manhattan on Thursday — one day after US District Judge Alvin Hellerstein issued the sentence — Hwang’s lawyer Barry Berke urged the judge to let his client serve 6 1/2 of the 18 years in home confinement instead of behind bars. The judge said he would consider the request.
Hwang was found guilty in July of orchestrating a scheme to mislead his bank counterparties into providing Archegos with billions of dollars in trading capacity that inflated the value of his portfolio, until the bubble burst in March 2021.
Berke told Hellerstein on Thursday that the judge’s sentence and remarks the day before had kept him up “most of the night thinking” and wondering whether the defense “could have, should have, done more to assist your honor” in arriving at the appropriate punishment.
Bankman-Fried Comparison
In preparing to sentence Hwang on Wednesday, Hellerstein had mused on how hard it is for a judge to determine just the right sentence, and compared Hwang’s crimes to those of FTX co-founder Sam Bankman-Fried. On Thursday, Berke said he had spent the night pondering questions including whether the defense should have brought up Bankman-Fried’s age.
Bankman-Fried got 25 years for his fraud at the cryptocurrency exchange but is 32 years old, “very different than 60-year-old Mr. Hwang,” Berke said.
Berke said federal prison rules would prevent Hwang from serving a sentence of more than 11 1/2 years in a minimum security prison. Instead, he’d be assigned to a facility that would include violent felons and an increased risk of harm, offer less access to medical care and pose additional difficulties for his family in visiting.
The judge ordered the parties to outline their arguments by Dec. 5 and said he would hold a hearing on Dec. 18. He asked the defense to privately submit information on Hwang’s health. He also agreed to allow Hwang to remain free pending the expected appeal.
Window for Berke
Thursday’s unusual twist took place at a court session that was a continuation of Wednesday’s all-day sentencing hearing. Hellerstein set the extra session to consider issues in addition to the prison term, including how much Hwang may have to repay victims of his crimes.
Typically, sentencings take place on a single day over several hours, and judges often postpone them to gather more information from both sides. Hellerstein’s decision to add a second day gave Berke an opportunity to urge the sentence modification.
Throughout Wednesday’s hearing, Hellerstein had signaled that he intended to impose a tough sentence. He called the defense’s initial request for no prison time “utterly ridiculous” in light of the money involved. Hwang himself spoke only briefly, telling the judge he felt “deep pain” about what happened at Archegos, but not admitting guilt.
The firm’s implosion contributed to the demise of one of the biggest names in finance, Credit Suisse Group AG, and caused significant losses at Morgan Stanley, UBS Group AG, Nomura Holdings and others.
The case is US v. Hwang, 22-cr-240, US District Court, Southern District of New York (Manhattan).
--With assistance from Ava Benny-Morrison.
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