1 00:00:02,440 --> 00:00:09,600 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to the 2 00:00:09,600 --> 00:00:13,600 Speaker 1: Bloomberg Law Podcast. Catch the program Monday through Thursday at 3 00:00:13,600 --> 00:00:17,040 Speaker 1: six pm Eastern on Applecarplay and Androad Auto with a 4 00:00:17,040 --> 00:00:20,360 Speaker 1: Bloomberg Business app. You can also listen live on Amazon 5 00:00:20,400 --> 00:00:23,720 Speaker 1: Alexa from our flagship New York station, Just Say Alexa 6 00:00:23,920 --> 00:00:25,600 Speaker 1: Play Bloomberg eleven thirty. 7 00:00:29,120 --> 00:00:33,520 Speaker 2: Former billionaire investor Bill Huang was sentenced to eighteen years 8 00:00:33,560 --> 00:00:37,840 Speaker 2: in federal prison today over the stunning collapse of Arkago's 9 00:00:37,920 --> 00:00:43,040 Speaker 2: capital management, which the prosecutor called a national calamity. In July, 10 00:00:43,200 --> 00:00:47,680 Speaker 2: a jury convicted Wong on ten criminal charges, including wirefraud, 11 00:00:47,800 --> 00:00:52,440 Speaker 2: securities fraud, and market manipulation for orchestrating a scheme to 12 00:00:52,520 --> 00:00:56,400 Speaker 2: mislead banks into providing Arkagos with billions of dollars in 13 00:00:56,480 --> 00:01:00,680 Speaker 2: trading capacity, which ultimately led to the collapse that cost 14 00:01:00,720 --> 00:01:03,920 Speaker 2: Wall Street Banks more than ten billion dollars. Joining me 15 00:01:03,920 --> 00:01:07,639 Speaker 2: as Bloomberg Legal reporter Chris Domesh, who covered the trial 16 00:01:07,720 --> 00:01:10,840 Speaker 2: and was in the courtroom for the sentencing, Chris, this 17 00:01:11,040 --> 00:01:16,320 Speaker 2: sentencing didn't follow this sort of normal script or procedures. 18 00:01:16,800 --> 00:01:19,319 Speaker 3: It was really just very bizarre. You know, most sentencing 19 00:01:19,360 --> 00:01:23,280 Speaker 3: procedures are very straightforward and move it a very time 20 00:01:23,360 --> 00:01:26,440 Speaker 3: capted script. You know, the two sides get up, they 21 00:01:26,560 --> 00:01:29,520 Speaker 3: argue over sentencing guidelines and other things in the pre 22 00:01:29,600 --> 00:01:32,240 Speaker 3: sentencing report, and then you know, the government gets up, 23 00:01:32,240 --> 00:01:34,600 Speaker 3: they make their arguments for whatever their recommendation is. The 24 00:01:34,600 --> 00:01:37,320 Speaker 3: defense gets up and they make their recommendation. In this case, 25 00:01:37,400 --> 00:01:40,199 Speaker 3: it kind of proceeded very slowly in an odd way, 26 00:01:40,319 --> 00:01:42,560 Speaker 3: and the judge said at the beginning, oh, well, this 27 00:01:42,640 --> 00:01:44,600 Speaker 3: might take all day long. We might have to come 28 00:01:44,640 --> 00:01:47,960 Speaker 3: back tomorrow morning, which everyone was like, that's very bizarre. 29 00:01:48,040 --> 00:01:50,760 Speaker 3: We don't see many two day sentencing hearings. In the end, 30 00:01:50,760 --> 00:01:52,920 Speaker 3: that is what happened. But he did pronounce sentence today, 31 00:01:53,480 --> 00:01:56,120 Speaker 3: and there was a lot of back and forth between 32 00:01:56,120 --> 00:01:58,920 Speaker 3: the judge and the defense lawyers. It just didn't go, 33 00:01:59,400 --> 00:02:02,280 Speaker 3: you know, by grip as it usually does, and in 34 00:02:02,320 --> 00:02:05,760 Speaker 3: the end, the judge pronounced sentence without kind of making 35 00:02:05,800 --> 00:02:09,400 Speaker 3: this the soliloquy that he usually does when they're pronouncing sentences, 36 00:02:09,400 --> 00:02:13,680 Speaker 3: which is to repeat all the factors that have taken consideration, deterrence, 37 00:02:14,600 --> 00:02:17,520 Speaker 3: the seriousness of the offense, all those things, and instead 38 00:02:17,520 --> 00:02:20,440 Speaker 3: he just kind of pronounced them in a very succinct, 39 00:02:20,520 --> 00:02:23,399 Speaker 3: quick manner, and they're coming back tomorrow morning to talk 40 00:02:23,440 --> 00:02:27,720 Speaker 3: about some remaining issues which include forfeiture and possible bail 41 00:02:27,800 --> 00:02:28,480 Speaker 3: pending appeal. 42 00:02:29,000 --> 00:02:32,160 Speaker 2: The prosecutors that asked for twenty one years, which is 43 00:02:32,560 --> 00:02:35,480 Speaker 2: a heavy sentence in a white collar case, and the 44 00:02:35,639 --> 00:02:39,720 Speaker 2: judge gave them close to what they wanted. Eighteen years. 45 00:02:39,840 --> 00:02:44,640 Speaker 2: That's a long sentence, especially considering that he's sixty years old. 46 00:02:45,080 --> 00:02:47,120 Speaker 3: Yes, the one thing you can kind of take from 47 00:02:47,120 --> 00:02:49,880 Speaker 3: that his attorneys that asks for no jail time, and 48 00:02:49,919 --> 00:02:52,760 Speaker 3: the judge called that ridiculous. He took the defense attorneys 49 00:02:52,760 --> 00:02:55,320 Speaker 3: to task on that request and kind of drilled down 50 00:02:55,360 --> 00:02:57,160 Speaker 3: on them to get them to come up with what 51 00:02:57,200 --> 00:03:00,280 Speaker 3: they thought was a more reasonable sentencing recommendation, which in 52 00:03:00,320 --> 00:03:03,040 Speaker 3: the end was forty six to fifty seven months. And 53 00:03:03,200 --> 00:03:06,960 Speaker 3: clearly the judge felt that given the amount of losses 54 00:03:06,960 --> 00:03:09,400 Speaker 3: in this case, he didn't really have the opportunity to 55 00:03:09,440 --> 00:03:14,080 Speaker 3: send a lesser sentence here. There are certain considerations going 56 00:03:14,080 --> 00:03:18,000 Speaker 3: into prison sentences. If you get more than I think 57 00:03:18,040 --> 00:03:19,880 Speaker 3: it's eleven and a half years, you have to go 58 00:03:20,320 --> 00:03:23,720 Speaker 3: basically a higher security prison. That leads to all kinds 59 00:03:23,720 --> 00:03:26,560 Speaker 3: of other considerations. Whereas a lesser sentence would maybe send 60 00:03:26,600 --> 00:03:28,720 Speaker 3: him to a minimum security or a camp or something 61 00:03:28,760 --> 00:03:31,240 Speaker 3: like that. So that's what they wanted. But in the end, 62 00:03:31,320 --> 00:03:33,720 Speaker 3: the judge clearly was not swayed by any of that. 63 00:03:33,880 --> 00:03:35,880 Speaker 3: And this is a pretty heavy sentence for a sixty 64 00:03:35,960 --> 00:03:36,480 Speaker 3: year old man. 65 00:03:36,760 --> 00:03:42,600 Speaker 2: Hwang is a devout Christian and his nonprofit foundation has 66 00:03:42,640 --> 00:03:46,040 Speaker 2: donated something like six hundred million dollars to different causes 67 00:03:46,080 --> 00:03:49,480 Speaker 2: like homelessness. Did the judge take that into consideration. 68 00:03:50,000 --> 00:03:52,840 Speaker 3: Well, he did actually take that into consideration, he just 69 00:03:52,840 --> 00:03:55,360 Speaker 3: didn't seem to give it much weight, and he said 70 00:03:55,480 --> 00:03:58,240 Speaker 3: essentially that a lifetime of good work doesn't offset the 71 00:03:58,320 --> 00:04:00,840 Speaker 3: massive losses in this case. You know, one of the 72 00:04:00,920 --> 00:04:03,440 Speaker 3: factors that the judges have to consider when they're sentencing 73 00:04:03,480 --> 00:04:07,320 Speaker 3: people is specific deterrence as to whether the individual would 74 00:04:07,440 --> 00:04:10,080 Speaker 3: you do it again, And clearly the judge said, look, 75 00:04:10,120 --> 00:04:12,400 Speaker 3: I'm not worried about that year. You know, he's a 76 00:04:12,440 --> 00:04:14,240 Speaker 3: six year old man. He's probably not going to commit 77 00:04:14,280 --> 00:04:16,479 Speaker 3: another crime. But he's a little worried about, you know, 78 00:04:16,600 --> 00:04:19,120 Speaker 3: his indifference towards what happened to him in the past. 79 00:04:19,160 --> 00:04:22,880 Speaker 3: When his former firm, Tiger Global, pleaded guilty and that 80 00:04:23,080 --> 00:04:25,960 Speaker 3: led to the formation of archigos. But like I said, 81 00:04:26,000 --> 00:04:28,880 Speaker 3: in the end, the judge was not swayed by that. Look, 82 00:04:28,920 --> 00:04:32,039 Speaker 3: Bill has a great reputation in terms of outside of 83 00:04:32,040 --> 00:04:35,480 Speaker 3: these allegations. You know, he's well liked by his friends, 84 00:04:35,520 --> 00:04:37,920 Speaker 3: he's known for his charitable works, he's a religious man. 85 00:04:38,560 --> 00:04:42,400 Speaker 3: But just those things alone going offset a thirty six 86 00:04:42,440 --> 00:04:43,440 Speaker 3: billion dollar loss. 87 00:04:43,880 --> 00:04:47,159 Speaker 2: What was the prosecutor's argument for why they wanted so 88 00:04:47,320 --> 00:04:51,120 Speaker 2: much jail time was it under the sentencing guidelines, And. 89 00:04:51,160 --> 00:04:55,200 Speaker 3: The sentencing guidelines are actually much more draftonian than that. 90 00:04:55,279 --> 00:04:57,400 Speaker 3: They would call for him to serve two hundred years 91 00:04:57,400 --> 00:04:59,480 Speaker 3: in prison, and that's the kind of sentences that are 92 00:04:59,520 --> 00:05:03,640 Speaker 3: normally or for people who commit mass murder or terrorists 93 00:05:03,720 --> 00:05:06,760 Speaker 3: or things like that. So they were well well within 94 00:05:06,839 --> 00:05:10,200 Speaker 3: their bounds to argue for this. And there arguments that 95 00:05:10,200 --> 00:05:12,560 Speaker 3: are really driven by the losses and the fact that 96 00:05:12,800 --> 00:05:15,600 Speaker 3: other people were hurt by this, not just the banks, 97 00:05:15,640 --> 00:05:18,599 Speaker 3: including his employees, some of whom lost millions of dollars 98 00:05:18,680 --> 00:05:22,320 Speaker 3: intoferred compensation. They lost their job. The prosecution clearly wanted 99 00:05:22,360 --> 00:05:23,760 Speaker 3: him to go to jail for a long time, and 100 00:05:23,800 --> 00:05:28,000 Speaker 3: they succeeded. Usually in white collar crimes, we see much 101 00:05:28,040 --> 00:05:30,920 Speaker 3: lower sentences just because the losses tend to drive up, 102 00:05:31,279 --> 00:05:33,720 Speaker 3: you know, the guidelines and what they recommend, But in 103 00:05:33,760 --> 00:05:36,680 Speaker 3: this case, you don't usually see the government get close 104 00:05:36,760 --> 00:05:38,359 Speaker 3: to what it wants when it wants to draw cunning 105 00:05:38,400 --> 00:05:39,720 Speaker 3: and set it did here. 106 00:05:40,080 --> 00:05:43,120 Speaker 2: That's what made it surprising when I saw the number. 107 00:05:43,400 --> 00:05:45,080 Speaker 2: What was Wong's reaction? 108 00:05:45,520 --> 00:05:47,760 Speaker 3: He really didn't react, which is kind of keeping with 109 00:05:47,800 --> 00:05:51,360 Speaker 3: how he's been throughout the trial, very stoic, drinking water throughout, 110 00:05:51,880 --> 00:05:55,280 Speaker 3: staring straight ahead, and you know, presumably he thinks he 111 00:05:55,320 --> 00:05:58,120 Speaker 3: has a shot on appeal. They've asked for bail pending appeals. 112 00:05:58,200 --> 00:06:00,880 Speaker 3: You know, the judge himself acknowledges their there issues that 113 00:06:00,920 --> 00:06:02,719 Speaker 3: are right for appeal. The one thing he kind of 114 00:06:02,720 --> 00:06:06,599 Speaker 3: took the prosecution it's tasked for is the argument that 115 00:06:06,880 --> 00:06:09,880 Speaker 3: he is unrepentant. And the judge said, he's always kind 116 00:06:09,880 --> 00:06:13,480 Speaker 3: of uncomfortable with arguments like that by the prosecutors because 117 00:06:13,480 --> 00:06:15,680 Speaker 3: people have a right to fight the charges against them. 118 00:06:16,200 --> 00:06:18,919 Speaker 3: And he, you know, he's said fastly maintained he's not 119 00:06:19,320 --> 00:06:22,599 Speaker 3: guilty here, so he has that right. And the judge said, 120 00:06:22,720 --> 00:06:24,720 Speaker 3: you know, he doesn't really like this kind of arguments. 121 00:06:24,839 --> 00:06:28,760 Speaker 3: Whether that appeal will be successful is obviously something that 122 00:06:28,880 --> 00:06:29,919 Speaker 3: is for the future. 123 00:06:30,440 --> 00:06:34,120 Speaker 2: On that point. That's what makes it difficult sometimes for 124 00:06:34,240 --> 00:06:37,839 Speaker 2: these defendants who are appealing to then speak to the 125 00:06:37,920 --> 00:06:41,400 Speaker 2: judge and tell them they're remorseful. What did Wang say. 126 00:06:42,160 --> 00:06:44,240 Speaker 3: Yeah, he stopped short of that, for sure, that's a 127 00:06:44,240 --> 00:06:47,839 Speaker 3: good question. Often you see defendants kind of you know, 128 00:06:47,960 --> 00:06:51,160 Speaker 3: make their case to the judge get emotional. Bill banks 129 00:06:51,160 --> 00:06:54,360 Speaker 3: the judge for taking the time to be thorough in 130 00:06:54,440 --> 00:06:57,920 Speaker 3: reading his sentencing letters that his friends and family said 131 00:06:58,000 --> 00:07:00,080 Speaker 3: to him. And he praised his friends and family for 132 00:07:00,120 --> 00:07:02,520 Speaker 3: writing the sentencing themost, and he said he felt bad 133 00:07:02,680 --> 00:07:05,240 Speaker 3: for the people who suffered. But I would say that 134 00:07:05,240 --> 00:07:09,640 Speaker 3: the statement stopped short of admitting that he did something wrong. 135 00:07:10,080 --> 00:07:12,760 Speaker 3: And maybe that is because of the appeal and that certainly, 136 00:07:12,920 --> 00:07:14,160 Speaker 3: you know, we see that often. 137 00:07:14,000 --> 00:07:16,760 Speaker 2: Not during the trial. A lot of his supporters came 138 00:07:16,960 --> 00:07:20,400 Speaker 2: every day. Did they have any reaction to the sentence? 139 00:07:20,760 --> 00:07:23,600 Speaker 3: They seem to hang their heads. They were here every day, 140 00:07:24,040 --> 00:07:27,040 Speaker 3: They spent a lot of time in the courtroom, in 141 00:07:27,080 --> 00:07:30,600 Speaker 3: the cafeteria, in the courthouse, and they were there for 142 00:07:30,680 --> 00:07:32,520 Speaker 3: him the whole time. And he thanked them, and he 143 00:07:32,560 --> 00:07:35,200 Speaker 3: greeted them today just like he did every day of 144 00:07:35,240 --> 00:07:35,680 Speaker 3: the trial. 145 00:07:36,120 --> 00:07:38,880 Speaker 2: Did the defense ever tell his story. I mean, he 146 00:07:39,000 --> 00:07:42,440 Speaker 2: has an amazing story, really a rags to riches story. 147 00:07:42,720 --> 00:07:44,760 Speaker 2: He came here from Korea and had nothing. 148 00:07:45,080 --> 00:07:47,840 Speaker 3: They did go into that. That was kind of the 149 00:07:47,880 --> 00:07:50,760 Speaker 3: heart of their initial argument is that you know that 150 00:07:50,840 --> 00:07:53,360 Speaker 3: he came here when he was a teenager father had 151 00:07:53,360 --> 00:07:56,520 Speaker 3: gotten a job as a pastor, and he emigrated when 152 00:07:56,520 --> 00:07:59,880 Speaker 3: he was nineteen, came here seeking better you know, treatment 153 00:08:00,040 --> 00:08:03,640 Speaker 3: options for a legally blind brother, and then his father 154 00:08:03,800 --> 00:08:06,880 Speaker 3: died within years of him arriving here, and they had 155 00:08:06,880 --> 00:08:09,400 Speaker 3: to find a way to survive because a job as 156 00:08:09,400 --> 00:08:12,120 Speaker 3: a line coak a McDonald's worked at swap meets, and 157 00:08:12,160 --> 00:08:14,360 Speaker 3: then moved to la with three thousand dollars to his 158 00:08:14,440 --> 00:08:16,760 Speaker 3: name and lived in the shed in the back of 159 00:08:16,760 --> 00:08:19,120 Speaker 3: a church with his family. They played up the charity, 160 00:08:19,360 --> 00:08:22,000 Speaker 3: you know, they said this was not a scheme. Really, 161 00:08:22,000 --> 00:08:24,920 Speaker 3: it was an effort to help people. They don't want 162 00:08:24,960 --> 00:08:28,200 Speaker 3: to make everything he did seem like some sort of 163 00:08:28,520 --> 00:08:32,160 Speaker 3: nefarious scheme when they argued these were just for you know, 164 00:08:32,360 --> 00:08:35,560 Speaker 3: he's a god fearing man and these were his attempts 165 00:08:35,640 --> 00:08:37,160 Speaker 3: to do good by his community. 166 00:08:37,800 --> 00:08:42,320 Speaker 2: What about restitution? How much do the prosecutors say was 167 00:08:42,440 --> 00:08:46,040 Speaker 2: lost here and how much restitution do they expect? I 168 00:08:46,240 --> 00:08:48,560 Speaker 2: understand he says he's not a billionaire anymore. 169 00:08:49,080 --> 00:08:51,600 Speaker 3: Yeah, he says he only has fifty five million dollars, 170 00:08:51,600 --> 00:08:54,640 Speaker 3: some of which are enjoying assets with his wife. Actually, 171 00:08:54,679 --> 00:08:57,200 Speaker 3: restitution is being deferred for a little while. They're going 172 00:08:57,280 --> 00:09:02,160 Speaker 3: to talk about forfeiture tomorrow, possibly any other issues like bail, 173 00:09:02,280 --> 00:09:05,240 Speaker 3: pending appeal and maybe you know, reporting dates, the kind 174 00:09:05,240 --> 00:09:07,840 Speaker 3: of things that come at the end of sentencing hearings. 175 00:09:07,880 --> 00:09:09,719 Speaker 3: After somebody's been pronounced. 176 00:09:09,360 --> 00:09:12,320 Speaker 2: With forfeiture, would they have to trace it back to 177 00:09:12,400 --> 00:09:16,640 Speaker 2: his alleged misdeeds somehow? I mean, how would they decide forfeiture? 178 00:09:17,200 --> 00:09:20,960 Speaker 3: So that's probably the most difficult proposition here. The defense 179 00:09:21,000 --> 00:09:23,960 Speaker 3: says there should be no porfeiture. From that argument seems 180 00:09:23,960 --> 00:09:27,280 Speaker 3: to be a little less forceful than they're one about restitutions. 181 00:09:27,440 --> 00:09:31,119 Speaker 3: But the government is seeking nine point eight billion dollars 182 00:09:31,160 --> 00:09:35,800 Speaker 3: in restitution as reimbursement for the victims the counterparty banks, 183 00:09:35,840 --> 00:09:41,000 Speaker 3: and they're seeking more than twelve billion dollars in forfeiture. Now, 184 00:09:41,400 --> 00:09:44,680 Speaker 3: the government acknowledges here that he doesn't have the money. 185 00:09:44,760 --> 00:09:47,040 Speaker 3: They say that regardless of the fact that he doesn't 186 00:09:47,080 --> 00:09:49,920 Speaker 3: have the money, these shills should be subject to this 187 00:09:50,040 --> 00:09:54,040 Speaker 3: forfeiture amount, just like say drug dealers who are convicted 188 00:09:54,160 --> 00:09:57,320 Speaker 3: who do a drug deal and lose the drugs. It 189 00:09:57,400 --> 00:09:59,840 Speaker 3: was a very interesting argue. You know it often that 190 00:10:00,000 --> 00:10:03,160 Speaker 3: often makes a confusing proposition for people. Why are you 191 00:10:03,240 --> 00:10:05,480 Speaker 3: going to ask somebody the forfeit money they don't have? 192 00:10:06,840 --> 00:10:10,520 Speaker 3: But I guess it's a tempting to establish a framework 193 00:10:10,559 --> 00:10:13,240 Speaker 3: for anyone who would would seek to recover money in 194 00:10:13,240 --> 00:10:13,600 Speaker 3: this case. 195 00:10:14,320 --> 00:10:17,240 Speaker 2: Does the judge think he has more money than he's 196 00:10:17,240 --> 00:10:21,160 Speaker 2: saying because I noticed the judge said something about Huang 197 00:10:21,240 --> 00:10:24,600 Speaker 2: buying a new condo in Hudson Yards. 198 00:10:25,040 --> 00:10:27,440 Speaker 3: Yes, he did note that. It's hard to say the 199 00:10:27,520 --> 00:10:30,480 Speaker 3: judge did. There's an extended questioning on that. So he's 200 00:10:30,520 --> 00:10:33,840 Speaker 3: definitely not clear on what he needs to do here 201 00:10:34,440 --> 00:10:36,800 Speaker 3: or how it could be done. So that that is 202 00:10:36,840 --> 00:10:38,720 Speaker 3: going to be the meat up tomorrow's argument. 203 00:10:39,160 --> 00:10:41,920 Speaker 2: And as far as appellet issues, do we already know 204 00:10:42,040 --> 00:10:46,000 Speaker 2: one of the issues because the judge kirktailed Wang's defense. 205 00:10:46,480 --> 00:10:48,600 Speaker 3: Yeah, that's certainly one of the issues that they're going 206 00:10:48,640 --> 00:10:51,080 Speaker 3: to raise. You know, they certainly raised it in some 207 00:10:51,120 --> 00:10:54,239 Speaker 3: of their post trial briefings. In their in their application 208 00:10:54,400 --> 00:10:58,040 Speaker 3: for bail pending appeal, they've noted that they call out 209 00:10:58,160 --> 00:11:02,720 Speaker 3: some of the expert testimony for the prosecution's expert when 210 00:11:02,760 --> 00:11:06,600 Speaker 3: she calculated that some of the trading losses were directly 211 00:11:06,920 --> 00:11:13,120 Speaker 3: attributable to long conduct or misrepresentations, and they say that 212 00:11:13,120 --> 00:11:16,120 Speaker 3: that can't be proven. So you know, whether or not 213 00:11:17,320 --> 00:11:21,160 Speaker 3: he actually they can attribute that there, that might be 214 00:11:21,240 --> 00:11:23,120 Speaker 3: one of the main things for appeal. 215 00:11:23,240 --> 00:11:24,880 Speaker 2: So a lot more to come, Chris, and I know 216 00:11:25,040 --> 00:11:28,000 Speaker 2: you'll be there tomorrow to tell us about it. Thanks 217 00:11:28,040 --> 00:11:31,360 Speaker 2: so much. That's Bloomberg Legal reporter Christopher Dolmesh