© Reuters. FILE PHOTO: Sung Kook (Invoice) Hwang, the founder and head of a non-public funding agency generally known as Archegos exits the Manhattan federal courthouse in New York Metropolis, U.S., April 27, 2022. REUTERS/Shannon
By Jonathan Stempel
NEW YORK (Reuters) – Invoice Hwang is searching for the dismissal of his U.S. fraud indictment over the collapse of his once-$36 billion Archegos Capital Administration LP, saying prosecutors dedicated misconduct by sandbagging him when constructing their case.
Hwang made the request in a Friday evening submitting in Manhattan federal court docket, the place he has pleaded not responsible to fraud and racketeering conspiracy fees over Archegos’ March 2021 demise.
Hwang’s legal professionals mentioned Division of Justice prosecutors hid previous to his arrest how Hwang had been their prime goal, the supposed “mastermind” of an enormous market manipulation scheme, and induced him to expose his protection technique.
“The federal government’s conduct can’t be precisely described as something apart from deceitful,” the legal professionals mentioned, calling the probe a “sham.”
Archegos imploded when it failed to satisfy margin calls following trades by means of so-called whole return swaps, leaving banks corresponding to Credit score Suisse Group AG and Nomura Holdings (NYSE:) Inc with about $10 billion of losses.
In a separate submitting, Hwang and co-defendant Patrick Halligan, Archegos’ former chief monetary officer, mentioned their indictment ought to be dismissed as a result of Archegos’ buying and selling exercise was “fully lawful,” utilizing strategies which are “clearly permitted by the present regulatory construction.”
A spokesperson for U.S. Legal professional Damian Williams in Manhattan declined to touch upon Saturday.
In alleging prosecutorial misconduct, Hwang’s legal professionals mentioned the federal government communicated often with them over six months, with Hwang sitting for 2 six-hour interviews, with out disclosing that it considered Hwang as a goal and never merely a “topic” of its probe.
These discussions, the final occurring two days earlier than Hwang’s April 27 arrest, “revealed what has now turn into (as prosecutors likely knew it will) his protection technique,” Hwang’s legal professionals mentioned.
“The court docket mustn’t countenance this lack of candor, breach of prosecutorial obligation, and end-run across the Structure and federal guidelines,” they added.
Hwang additionally desires U.S. District Decide Alvin Hellerstein, who oversees the case, to carry a listening to to find out the extent of any taint.
A trial of Hwang and Halligan is scheduled for Oct. 2023. Halligan has additionally pleaded not responsible.
The case is U.S. v. Hwang et al, U.S. District Courtroom, Southern District of New York, No. 22-00240.