Korean investor who caused U.S. court 'margin call' to serve 18 years in prison

The U.S. court kept the 18-year prison term in place for Bill Hwang (Korean name Hwang Sung-guk), a Korean-American investor who shook Wall Street in March 2021 due to the derivatives margin call (request for additional deposits).

A federal court in southern New York ruled against Hwang's request to convert the latter six and a half years of his 18-year sentence into house arrest, calling it "unrealistic."

In response to Hwang's request, the court said, "We should be treated the same as treating other defendants with health problems."

Earlier on the 20th of last month, Hwang was sentenced to 18 years in prison on charges of fraud and other charges at the sentencing hearing.

However, the court did not detain Hwang in court, but allowed him to face an appeal trial without detention.

The New York Southern District Prosecutors' Office put Hwang on trial in April 2022, accusing him of market manipulation that brought down a $36 billion (about 50.4 trillion won) company and caused more than $10 billion (about 14 trillion won) in losses to lenders.

Hwang invested $50 billion (about KRW 70 trillion) worth of shares in 2020, more than five times his holdings, through derivatives Total Return Swap (TRS) and CFD contracts with investment banks.

Hwang's borrowing surged to $160 billion (about 224 trillion won) at the time, but when the stock price of the investment stock fell, a margin call occurred that required additional evidence and the company eventually went bankrupt.

The loss suffered by investment banks is estimated to be $10 billion.

Swiss investment bank Credit Suisse (CS) was also acquired by rival UBS due to losses it made in a deal with Archegos, which Hwang founded.