(NEW YORK) — Federal prosecutors in New York on Wednesday announced criminal charges against the founder of a private investment firm and its chief financial officer for alleged “manipulative trading” and “deceptive conduct” that led to a multibillion-dollar fraud.

Bill Hwang, the founder of Archegos Capital Management, and Patrick Halligan, the CFO, were charged with racketeering conspiracy, securities fraud and wire fraud.

According to the indictment, Hwang and Halligan “corrupted the operations and activities of the family office known as Archegos” and used it “as an instrument of market manipulation and fraud.” Family offices serve high-net-worth individuals and families.

Lawrence Lustberg, an attorney who represents Hwang, said he was “extremely disappointed” with the charges.

“We are extremely disappointed that the U.S. Attorney’s Office has seen fit to indict a case that has absolutely no factual or legal basis; a prosecution of this type, for open-market transactions, is unprecedented and threatens all investors,” Lustberg said in a statement. “As you will see when the facts unfold, Bill Hwang is entirely innocent of any wrongdoing; there is no evidence whatsoever that he committed any kind of crime, let alone the overblown allegations that pervade this indictment.”

Mary Mulligan, a lawyer for Halligan, said in a statement that her client is “innocent and will be exonerated.”

The consequences were far-reaching, prosecutors said. The stock prices of a number of companies were manipulated, employees’ savings were gambled and different banks were left with billions of dollars in losses. UBS alone lost $861 million, according to the indictment.

The criminal charges followed the spectacular implosion, in March 2021, of Archegos, which lost billions in mere days. Prosecutors said Hwang traded in a way that hid the true size of his positions from the rest of the investing public.

The alleged criminal conduct pumped Archegos’ portfolio – Hwang’s personal fortune – from $1.5 billion to $35 billion in one year, according to prosecutors.

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