Archegos Founder Bill Hwang to Seek Dismissal of Market-Manipulation Charges

March 21, 2023 – Media Mention
The Wall Street Journal

Arthur Jakoby, partner and co-chair of Herrick's Securities Litigation and Enforcement Group, spoke with The Wall Street Journal about the charges brought against the founder of Archegos Capital Management. Last year, federal prosecutors charged several Archegos employees with racketeering, securities fraud and market manipulation. Bill Hwang, the Archegos founder, is now seeking dismissal of the market manipulation charges claiming that prosecutors have mischaracterized legal trading as criminal market manipulation. 

Arthur, former Special Trial Counsel in the SEC’s Division of Enforcement, said Mr. Hwang appears to have made dangerous trades and held an irrational exuberance about the value of stock he purchased, but that isn't illegal. "Foolish trading is not a crime," he said.

Prosecutors allege that when Mr. Hwang's trades are looked at in the aggregate, they constitute illegal trading. But there was nothing illegal about each individual trade, said Arthur.

"That is a somewhat unprecedented legal theory," he concluded.

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