Billion-Dollar Reprobate

Bill Hwang lost billions investing 'according to the Will of God.' Now he's going to prison for cheating Wall Street banks

“Some have strayed from the faith in their greediness, and pierced themselves through with many sorrows.” – 1 Timothy 6:10

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Either Bill Hwang wasn’t truly following the Holy Spirit or the Almighty has a cruel sense of humor when it comes to money.

“I try to invest according to the Word of God and the power of the Holy Spirit,” founder of Archegos Capital Management proclaimed. “It’s a fearless way to invest.”

Hwang, 60, received 18 years in prison last week after blowing up his $36 billion investment firm in March 202. He was convicted in July on 10 counts of securities fraud, wire fraud, conspiracy, racketeering and market manipulation. He was accused of lying to his lenders about his risky bets and illegally jacking stock prices.

Some of the world’s largest banks – including Nomura Holdings and Credit Suisse (now part of UBS), Morgan Stanley, and Goldman Sachs – lost a combined $10 billion lending to Archegos. Hwang, himself, saw his net worth plunge from $36 billion to $55 million, his lawyers claim. And stocks that he manipulated lost $100 billion in value, prosecutors estimated, calling it a fraud on par with Sam Bankman-Fried at crypto-exchange FTX.

“You cannot serve God and mammon.” – Matthew 6:24. (Illustration credit: AI generated.)

‘Capitalists who serve God’

Hwang was born in South Korea in 1964 and immigrated to the U.S. with his parents in 1982. His father was a pastor, which may explain why Hwang was so preachy.

He ran his investment firm side-by-side with his Grace & Mercy Foundation – one of the largest donors to Evangelical causes, including megachurches, Focus on the Family, and the Museum of the Bible.

“Wall Street’s Most Famous Evangelical Sentenced in Unprecedented Fraud Case,” screamed the headline in Christianity Today, which devoted plenty of coverage to this fresh stain on the faith.

Hwang claimed he was bringing capitalists to Christ in a 2019 YouTube video:

“Not many people on Wall Street know Jesus. So it was great when I was able to lead some of these friends to Christ. It makes me extremely happy when I produce really good results, share God’s culture, and raise capitalists who serve God.”

He didn’t repent

Conspicuous religiosity was never a reason for banks to ply Hwang with billions in trading credit.

In 2012, the Securities and Exchange Commission fined Hwang $44 million following an insider trading investigation at his former investment fund, Tiger Asia Management. Hwang wasn’t charged criminally but his firm was, and Hwang pleaded guilty on its behalf.

Hwang hasn’t admitted wrongdoing and plans to appeal his conviction. At his sentencing, he apologized for “what happened.” And he thanked the Lord for his gains: “I am grateful to God for so many blessings I’ve had in my life.”

Born again cheater

It wasn’t Jesus who gave Hwang a second chance. It was Nomura.

The Japanese financial giant had a previous relationship with Hwang’s Tiger Asia Management hedge fund, shuttered in 2012 over its insider trading debacle. Reuters took a stab at trying to explain why Nomura signed up with Hwang twice.

Nomura wanted exposure to the tech and media companies – such as Discovery, Viacom and Tencent – where Archegos was amassing outsized positions using derivatives. Why Nomura couldn’t find this investment strategy somewhere else is not clear.

"It was, 'They paid their fines, everything's settled ... they are open for business,'" a former Nomura employee told Reuters. "It was like 'OK ... what are you looking to do?'"

Once Nomura was in, and Archegos posted favorable results, other giant banks followed each other over the cliff like demon-possessed pigs in the Bible.

A Bible lesson might have saved them: Beware of false profits.

“Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravenous wolves. Ye shall know them by their fruits.” – Matthew 7:15-16.

God is my co-Pilot

Archegos is a Greek word used in the New Testament to describe Christ as a prince and the author of salvation. Hwang ran the firm on the same floor with his Grace & Mercy Foundation, an organization he funded with his own $600 million.

In a shared conference room, employees held prayers and scripture readings.

“I invest with God’s perspective, according to His timing,” he professed in the 2019 YouTube video.

This one sentence should have been enough to give banks pause. Not even God tries to time the market. Banks that collectively lost $10 billion to Hwang reaped what they had sown.

“Pray that the markets rise tomorrow,” a top Archegos executive wrote in an email as the firm began to collapse.

But prayer is not an investment strategy.

“The point at which your business plan requires divine intervention is the point at which you have a solvency problem,” prosecutor Andrew Mark Thomas noted in closing arguments.

Good people do bad things

We rarely hear a defense attorney in a murder trial argue that his client should be spared punishment because other than just this one little murder he was a really good person. Yet this is what we often hear in white collar criminal cases.

Hwang’s defense attorneys argued for no prison time, noting their client’s considerable contributions to Christian charities.

“Bill’s only hobbies are faith, food, philanthropy, and books, and the project of his life is sharing them with everyone he meets,” his lawyers wrote in a pre-sentencing memo.

Good people do bad things. Bad people do good things. And it’s not always easy to tell them apart.

Hwang presented himself as a humble Christian, but in a lawsuit some of his employees have characterized him as a narcissistic egomaniac who created a toxic office culture and tolerated zero dissent.

The firm, “operated like Hwang’s personal fiefdom and platform for him to pursue his oft-stated grandiose goal of becoming ‘the richest person in the world,'” according to the lawsuit.

Good person, bad person is not the question before the court. It’s, did he do it? And, how is justice best served?

“I have to take into consideration the good and the bad,” said Federal Judge Alvin Hellerstein in sentencing Huang.

He then slapped him with 18 years and three years of supervised release.

Apparently, Hwang’s supposed good didn’t outweigh the billions lost to his delusions and deceptions.

Fish tales

Christian leaders do a lot of whining about the decline of moral values in our secular society. Rarely do they properly address the lapses within their own ranks.

Hwang joins a horde of Christians who have made a mockery of their faith, from the Catholic church covering for pedophile priests to money-grubbing Protestant preachers imposing their self-proclaimed moral superiority on broader society.

Mixing money with religion is the road to hell.

Scriptures are replete with warnings: No one can serve two masters. Treasures stored on Earth will rust and decay. Camels go to through needle-eyes before rich men go to heaven. And the love of money is the root of all evil.

I like the darker outlook for Christian hypocrites found in the Bible’s final book:

“You say, ‘I am rich, have become wealthy, and have need of nothing’ – and do not know that you are wretched, miserable, poor, blind, and naked. ” – Revelation 3:17

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