He Lost $36B in a Week. Now Bill Hwang Is Fighting to Avoid Prison
bloomberg.com
bloomberg.com
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To add, anyone under indictment and bail is closely monitored. They can't just transfer money to a Swiss Bank without raising an alarm.
HNers enjoy cooking up movie-plot schemes that are dumb in reality.
“With Bitcoin I can hide anywhere and access my fortune with just a password!”
…But he made such a public deal out of it that some criminals figured they can access a fortune by kidnapping this guy and making him reveal the password.
How would you do that?
That era is long gone.
x=https://www.bloomberg.com/news/features/2024-05-01/bill-hwang-fights-prison-time-after-hastening-credit-suisse-collapse
tnftp -o\|yy089 $x > 1.htm
firefox ./1.htm
links ./1.htm # then press '\' key
I was under the impression that he had an old fashioned value play, levered up to the moon using total return swap (these do have real uses) which blew up on him.
Unless he deliberately mislead his brokers should was it illegal?
> The complaint also alleges that, as part of the scheme, Archegos repeatedly and deliberately misled many of Archegos’s counterparties about Archegos’s exposure, concentration and liquidity, in order to get increased trading capacity so that Archegos could continue buying swaps in its most concentrated positions, thereby driving up the price of those stocks. Ultimately in March 2021, price declines in Archegos’s most concentrated positions allegedly triggered significant margin calls that Archegos was unable to meet, and Archegos’s subsequent default and collapse resulted in billions of dollars in credit losses among Archegos’s counterparties.
> The SEC’s complaint, filed in federal district court in Manhattan, charges Hwang and the other defendants with violating antifraud and other provisions of the federal securities laws. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties. The SEC also seeks to bar individual defendants from serving as a public company officer and director.
as a counter example, the Chinese markets are rife with accounting frauds, scams and scandals; and the market doesn't really track with the Chinese economy as a result because no one believes it is accurate
One mortgage is safe for the banks because they can take back the house. Low risk means low rates.
If you could take 5 mortgages, that would be very risky for the banks so they wouldn't give you a loan or charge much higher interest.
Hence you can't take more than one mortgage.
But what if you lie to the bank when you apply for mortgage?
Well, to prevent that we made lying to the banks about such things a crime.
Hwang is accused of a variation of that: he got loans from multiple banks without telling them about other loans i.e. lying to banks.
He made leveraged investments into lousy stocks and when he got called on those loans, he couldn't repay them and banks that gave him loans lost billions.
When I get a mortgage I have to provide proof of income and assets with bank statements.
Did he forge documents, or did the banks just take his word for it ?
To get those five mortgages, maybe you could just exaggerate the value of the property by 5x? Lenders would think there’s ample collateral, but in fact the property is over-leveraged.
Unlike Hwang, Trump’s scheme didn’t blow up and result in massive losses for the banks. But the underlying fraud was the same.
The article seems to be fixated on how he lied to his finance sources, and acts like that was the only thing he did wrong.
If you read the SEC lawsuit [1], the problem is less that he lied to his finance sources and more about what he did with the funds, which was blatant market manipulation:
"Archegos, through Hwang and Tomita, effected this scheme by dominating the market for its Top 10 Holdings, as well as by “setting the tone” (i.e., engaging in large pre- market trading), bidding up prices by entering incrementally higher limit orders throughout the trading day, and “marking the close” (i.e., engaging in large trading in the last 30 minutes of the trading day) and by other non-economic trading, all with the goal of artificially inflating the share prices of its Top 10 Holdings."
I mean, obviously he lied to his finance sources. It's not like he was going to tell them that he was using their funds to manipulation the market.
[1] https://www.sec.gov/files/litigation/complaints/2022/comp-pr...
I wonder if any of them are designed to watch out for this behavior and avoid those stocks.
That can work if greater fools come and buy the overpriced stocks back off you but didn't in this case, ending with the stock prices falling back down and the lenders getting stiffed.
All those paper profits would have to be converted into real money at some point, and the massive sales would have dampened the share prices, negating the point in the first place.
He was trading like a WSB subscriber but with actual billions in capital. From what is known publicly, the guy lived frugally and wasn't a status or prestige chaser. He seems more like someone with an excessive risk appetite who got in over his head.
I also find it interesting that Bill Hwang amassed over $30 billion, and no one would have known if his family office hadn't fallen apart. This makes me wonder how many Wall Street billionaires are hiding in plain sight, only known by industry peers.
Sometimes I fear the 401k plans in the US will collectively do the same. Is there any way to see the net inflow and outflow of these plans?
> And forgive us our debts, as we also have forgiven our debtors.
In the original Greek of Matthew's prayer, the word is "ophelilema", as in financial debt. There are other words for more metaphorical debts like when breaking rules, which were notably not used.
Akhshually Jesus would have been speaking Aramaic. So even if Matthew wrote his Gospel in Greek it may not necessarily be the most accurate translation of what Jesus actually said. /end pedantry
In any case, the "gospel of prosperity" types in Christianity are second only to the "secretly a sex pest" types in regards to how obnoxious they are and how much of a black eye they give to Christianity's reputation.
Actually, like most people in the world, and especially people in "border lands", if he existed, he probably will have been multilingual. Aramaic for sure, but he might also have spoken some Hebrew, Greek and maybe even Latin.
A true Christian will by definition be preaching the gospel to the lost and dying world at every opportunity
As the article implies, it’s not like he cherished the high life and bought lots of assets. He seems like someone addicted to stock gambling.
Also worth noting that being active in an organization like a church provides one with a sizable community of people, many of whom are probably at least doing okay, and depending which church, can be quite wealthy and they will automatically find you more trustworthy because you are in "their group," so fraud is baseline easier to execute. And, in the odd event you are caught out, a well performed "reformation" will have you as a in-good-standing member of that community again, and probably benefiting from the charity of it's members in short order.
This is a big part of why MLM/pyramid schemes, the Mormons, and the state of Utah are so deeply intertwined.
And I mean, let's not leave out the obvious one: people big on magical thinking aren't generally the best at critical thinking.
This is not to say that religious people are the only ones who can be scammed, that's of course nonsense. But people who believe things like "god has a plan" and indulge in the just world fallacy freely and "everything happens for a reason" are on balance just plain easier to manipulate, and even if as that one quoted pastor says, that Hwang is a true believer, well that could just mean he believes his schemes are god's plan, that his actions are god's creation, that what he has done is what he was put on this earth to do, and all that. He could be a swindling liar or a true believer, it doesn't matter. How many people have done diabolical things in our history believing whatever deity they believe in had created them to do it? It's just motivated reasoning. You believe in a just and mighty god, and you have ideas for how to do anything, steal from people, amass wealth, harm people, whatever, and it just so happens that you find all the passages from your god that cosign what it is you already wanted to do? No kiddin, weird how that always works out.
I'd guess at some social function of the equalizing narrative of universal/original sin and Jesus being the scapegoat for it. Being highly reductive about it, I can imagine the prosocial lens and the antisocial one.
Through the prosocial lens, it says that we must all be humble regardless of our propriety or material accomplishments, because even the greatest and purest of us are not above sin. We must respect the struggle of our fellow fallen man against the unrelenting pull of temptation to commit transgressions, and remind ourselves to demonstrate Christlike mercy when they fail.
Through the antisocial lens, it says that you might as well lie/cheat/plunder/exploit/murder and beg for forgiveness if you're caught, because you're considered tainted in either case. In an odd way, the stereotypical evangelical redemption/rebirth narrative arguably values greater sins more than lesser ones: "if the blood of the Lamb can cleanse this sin from me, then your salvation is certain".
It would probably say:
Jesus explained in in Matthew 19:24 the two interests might be incompatible.
When a regular person says "heaven has blessed me with this and that", that's making a statement of fact, that person says he has this and that and he credits the deity, nothing more. But when a prosperity gospel guy says such, that person is engaging in theurgy. He believes that the deity blessed him in such and such a manner and by publicising the fact the deity must necessarily bless him with much much more money.
Positive thinking and "law of attraction" is less overtly Christian but made from the same cloth and just as detestable.
If you find that theology distasteful, childish or blasphemous you are not alone.
> The artwork, commissioned in 2016, is rendered in metal mesh by renowned South Korean artist Seungmo Park. Park also created a larger-than-life depiction of Olympic sprinter Sebastian Coe for Nike’s headquarters in Oregon and the façade of Gucci’s flagship store in Seoul.
I noticed the texture looked odd when I zoomed into the photo. I suspect Park did the best he could, but the medium itself seems poorly-suited for the vision.
Where’s the fraud?
Yeah but Credit Suisse was a 150 year old public company held in peoples retirement accounts and the like.