© Reuters. FILE PHOTO: Sung Kook (Invoice) Hwang, the founder and head of a personal funding agency referred to 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 prices over Archegos’ March 2021 demise.
Hwang’s attorneys stated Division of Justice prosecutors hid previous to his arrest how Hwang had been their prime goal, the supposed “mastermind” of an unlimited market manipulation scheme, and induced him to disclose his protection technique.
“The federal government’s conduct can’t be precisely described as something aside from deceitful,” the attorneys stated, calling the probe a “sham.”
Archegos imploded when it failed to satisfy margin calls following trades by way of so-called complete return swaps, leaving banks comparable 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, stated their indictment ought to be dismissed as a result of Archegos’ buying and selling exercise was “totally 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 attorneys stated the federal government communicated incessantly with them over six months, with Hwang sitting for 2 six-hour interviews, with out disclosing that it seen 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 develop into (as prosecutors probably knew it might) his protection technique,” Hwang’s attorneys stated.
“The court docket shouldn’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 Choose 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.