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Archegos founder Bill Hwang convicted at fraud trial over fund’s collapse

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Archegos founder Bill Hwang convicted at fraud trial over fund’s collapse

Archegos Capital Management founder Sung Kook “Bill” Hwang has been convicted of fraud and other charges by a jury in a Manhattan federal court at a criminal trial in which prosecutors accused him of market manipulation ahead of the 2021 collapse of his $36bn private investment firm.

On Wednesday, the jury, which began deliberations on Tuesday, found Hwang guilty on 10 of 11 criminal counts, and Patrick Halligan, his Archegos deputy and co-defendant, guilty on all three counts he faced. Hwang and Halligan sat flanked by their lawyers as the verdict was read by a soft-spoken foreperson.

United States District Judge Alvin Hellerstein set the sentencing for October 28. Both men will remain free on bail.

The Archegos meltdown sent shock waves across Wall Street and drew regulatory scrutiny on three continents. Prosecutors have said Hwang and Halligan lied to banks in order to obtain billions of dollars that they used to artificially pump up the stock prices of multiple publicly traded companies. The trial began in May.

Hwang, 60, had pleaded not guilty to one count of racketeering conspiracy, three counts of fraud and seven counts of market manipulation. Halligan, 47, had pleaded not guilty to one count of racketeering conspiracy and two counts of fraud. Halligan was the chief financial officer at Archegos.

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They now face maximum sentences of 20 years in prison on each charge for which they were convicted, though any sentence would likely be much lower and would be imposed by the judge based on a range of factors.

When the charges were brought in 2022, the US Department of Justice called the case an example of its commitment to hold accountable people who distort and defraud US financial markets.

Jurors heard closing arguments on Tuesday.

Implosion

The trial centred on the implosion of Hwang’s family office Archegos, which inflicted $10bn in losses at global banks and, according to prosecutors, caused more than $100bn in shareholder losses at companies in its portfolio. Prosecutors said Hwang’s actions harmed US financial markets as well as ordinary investors, causing significant losses to banks, market participants and Archegos employees.

Hwang secretly amassed outsized stakes in multiple companies without actually holding their stock, according to prosecutors. Hwang lied to banks about the size of the derivative positions of Archegos in order to borrow billions of dollars that he and his deputies then used to artificially inflate the underlying stocks, prosecutors said.

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Halligan was accused by prosecutors of lying to banks and enabling the criminal scheme.

During closing arguments, Assistant US Attorney Andrew Thomas told jurors, “By 2021, the defendants’ lies and manipulation had ensnared nearly a dozen stocks and half of Wall Street in a $100bn fraud, a fraud that came crashing down in a matter of days.”

Hwang’s defence team painted the indictment as the “most aggressive open market manipulation case” ever brought by US prosecutors. Hwang’s attorney, Barry Berke, told jurors in his closing argument that prosecutors criminalised aggressive but legal trading methods.

Archegos’s head trader, William Tomita, and chief risk officer, Scott Becker, testified as prosecution witnesses after pleading guilty to related charges and agreeing to cooperate in the case.

According to the US Attorney’s Office for the Southern District of New York, which brought the case, Hwang’s positions eclipsed those of the companies’ largest investors, driving up stock prices. At its peak, prosecutors said Archegos had $36bn in assets and $160bn of exposure to equities.

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When stock prices fell in March 2021, the banks demanded additional deposits, which Archegos could not make. The banks then sold the stocks backing Hwang’s swaps, wiping out an alleged $100bn in value for shareholders and billions at the banks, including $5.5bn for Credit Suisse, now part of UBS, and $2.9bn for Nomura Holdings.

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Zelenskyy stops in Ireland on way back from NATO summit

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Zelenskyy stops in Ireland on way back from NATO summit

Ukrainian President Volodymyr Zelenskyy met with Irish Prime Minister Simon Harris at Shannon airport in the west of Ireland on Saturday. About President Biden’s slip of the tongue at the NATO summit he said: “We can forget mistakes”.

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Ukrainian President Zelenskyy made a short stop in Shannon, Ireland on his way home from the NATO summit held in Washington DC.

Zelenskyy met Irish Taoiseach (Prime Minister) Simon Harris and when asked by journalists about President Biden introducing him as “President Putin” he said it was a “mistake” and that because the US had “done a lot” for Ukraine, “we can forget some mistakes”.

On Thursday, at the final press conference of the NATO Summit, Biden confused Zelenskyy with Russian leader Vladimir Putin and also referred to Vice President Kamala Harris as “Trump”.

Zelenskyy then went on to thank Ireland for their help housing refugees.

“Thank you so much for your support, thanks to the people of Ireland for hosting a lot of Ukrainian refugees. You are with us from the very beginning of [the] Russian invasion. Thank you so much,” said Zelenskyy.

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The Taoiseach said he will visit Ukraine’s capital Kyiv “in the coming weeks”.

Harris also confirmed that the two leaders had discussed a potential bilateral agreement on demining, energy, humanitarian assistance and food security.

He stated: “Of course, Ireland is militarily neutral, but we’re not in any way neutral in terms of understanding the difference between right and wrong, evil and good, freedom and oppression. And we’ve provided very practical assistance to Ukraine in terms of advancing their cause for EU membership.”

Harris also promised to work towards bringing Ukrainian children abducted by Russian forces home.

The Irish government has provided €250m in non-lethal military assistance to Ukraine under the European Peace Facility and the country has welcomed over 108,000 Ukrainians under the EU Temporary Protection Directive.

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Swing-state Democrat Casey walks a fine line between his own campaign and turmoil surrounding Biden

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Swing-state Democrat Casey walks a fine line between his own campaign and turmoil surrounding Biden

HARRISBURG, Pa. (AP) — Pennsylvania Sen. Bob Casey has a fine line to walk.

He and other Democrats fighting to hang on to hotly contested Senate seats have seemed jittery about the turmoil surrounding President Joe Biden after his disastrous debate performance. In many cases they’re trying to minimize any damage to their own races by saying as little as possible about it in public.

But with control of the Senate on the line, the drama is an unavoidable and unwelcome development for Democrats. They are defending far more Senate seats than Republicans this year, including in the presidential swing states of Pennsylvania, Wisconsin, Michigan, Nevada and Arizona.

Incumbents in Republican-leaning Montana and Ohio appear nervous, too, and there’s an unexpected challenge in the Democratic stronghold of Maryland from former Republican Gov. Larry Hogan.

The turmoil surrounding Biden is especially delicate for Casey, long seen as one of the safest Democratic bets in battleground races. He has defended Biden, but in the halls of the Capitol this week, even Casey brushed aside questions about how Biden’s predicament might affect his race.

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“I’ve got work I got to do as a senator and as a candidate,” he told The Associated Press. “I’m not going to be a pundit or an analyst. Obviously voters can make up their own minds.”

What to know about the 2024 Election

Casey grew up on the same street as Biden in Scranton. Their families have known each other for decades, and he’s campaigned with Biden countless times, including this year. Biden — a Delaware resident but a Pennsylvania native, as is first lady Jill Biden — has long claimed Pennsylvania as his own.

When Casey’s mother died last year, Biden came to Scranton to pay his respects.

On Sunday, Casey greeted Biden in Philadelphia on the president’s campaign swing through Pennsylvania, attending worship services with him at a predominantly Black church there. Answering reporters’ questions during his own campaign events, Casey has maintained that he supports Biden and was not concerned about his debate flop.

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Still, Casey’s backing has lacked the gusto of Pennsylvania’s other Democratic senator, John Fetterman, who told Biden supporters in Pennsylvania that Biden is “the only person that’s ever kicked Trump’s ass in an election.”

Other Democratic incumbents have been less hesitant to set themselves apart from Biden, before and after the debate. Democratic Sens. Jacky Rosen of Nevada, Tammy Baldwin of Wisconsin, Jon Tester of Montana and Sherrod Brown of Ohio have offered little public support for the president since the debate.

Tester and Brown — prime GOP targets in states that Republicans have dominated in recent years — have been distancing themselves from Biden for quite some time.

For Tester, a centrist lawmaker representing a fossil fuel-friendly state, steering clear of national Democrats has long been crucial to his political survival. Most recently, he pushed back against the administration over new pollution rules that could hurt Montana’s energy industry.

Yet Tester has also said that the president himself was doing a good job — comments that his opponent, Republican Tim Sheehy, resurrected in an online campaign ad after Biden’s shaky debate performance.

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In a statement this week, Tester adopted a more skeptical stance. He said Biden must “prove to the American people — including me — that he’s up to the job.”

Montana voter Kathryn Natzel, a self-described moderate Democrat, supports Tester for his position on women’s reproductive rights and is clear about her reasoning.

“Don’t tell me what to do with my family,” she said.

But the 29-year-old stay-at-home mother from Billings worries younger voters who cringe at Biden’s age could also turn against Tester as he seeks a fourth term.

“It’s kind of a point against him for younger people,” Natzel said, noting that Tester’s political career spans almost her whole life.

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Brown, the Ohio incumbent, was asked repeatedly about Biden on a conference call with reporters Wednesday. The subject of the call was federal rules for hydrogen hubs, but the questions focused heavily on Biden.

Brown acknowledged there are “legitimate questions” about whether Biden should continue his campaign. The senator wouldn’t answer when asked what he told colleagues privately about Biden or if he thought having Biden on the ballot hurts other Democrats, including him. He even refused to answer directly when asked if he supported the president.

“I’m not talking about politics on this call,” Brown said. “I’ve said enough.”

On a campaign swing through Wisconsin, Baldwin told reporters that the “bottom line” is that it’s Biden’s decision on whether to run and that she’s heard a lot from voters and “passed those onto the White House.”

In Pennsylvania, for the most part, Casey has brushed aside questions about how Biden’s predicament might impact his race. But his opponent, former hedge fund CEO David McCormick, is highlighting Casey’s support for Biden. In digital ads, McCormick’s campaign calls Casey the “one man who will never leave Biden.” Clips of Biden calling Casey “one of my best buddies,” “one of my closest friends” and “Bobby Casey” drive home the point.

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When he has talked about it, Casey has acknowledged that Biden had a bad night. But at a recent appearance with Biden in Harrisburg, e asserted that voters would ultimately side with Democrats, even in the race for the presidency. He said it comes down to whether candidates support reproductive rights for women, working families rather than billionaires, and voting rights over an insurrection.

“I do think people across the country, they have real a sense of what’s at stake in this race,” he said.

___

Associated Press writer Mary Clare Jalonick in Washington contributed to this report. Brown reported from Billings, Montana.

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NATO's Stoltenberg sidesteps Biden, Trump spat, champions nations hitting spending targets

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NATO's Stoltenberg sidesteps Biden, Trump spat, champions nations hitting spending targets

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As the NATO summit drew to a close Thursday, signs the contentious U.S. presidential race was just kicking off became increasingly clear as President Biden and former President Trump used the international event as an opportunity to bolster their campaigns.

Speaking with Fox News’ Brian Kilmeade, NATO Secretary General Jens Stoltenberg refused to credit just one man when it comes to the jump in GDP defense spending that NATO nations have made in 2024. Twenty-three of the 32 allies have now met their 2% commitments. 

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“Former President Trump had a very clear message that the European allies had to pay more. This has been a message from consecutive U.S. administrations, and this message has had an impact,” Stoltenberg said. 

NATO Secretary General Jens Stoltenberg refuses to get caught up in President Biden-Donald Trump tiff.  (Getty Images)

ZELENSKYY SAYS UKRAINE CAN’T WIN WAR UNLESS US LIFTS LIMITS ON STRIKING MILITARY TARGETS IN RUSSIA

Trump and Biden have pointed to the record number of NATO nations hitting their GDP defense spending commitments, first pledged in 2006, as significant accomplishments of their corresponding presidencies.

Trump has been vocal in saying he forced NATO allies to pony up during his tenure. 

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The number of allies to meet their spending commitments did increase to nine in 2020 from the five nations who met their commitments in 2016 when he entered office. That number dropped to six once he left in 2021.

The greatest jump in NATO defense expenditure occurred this year when, for the first time ever, 23 of the 32 nations under the alliance met their spending agreements.

Supporters of Trump point to the war in Ukraine, not the Biden administration, as the main driving force behind this jump in European defense spending.

Canada, which has garnered years of scrutiny for its apparent refusal to meet its defense spending commitment, announced Thursday it would finally fulfill its 2% spending pledge by 2032. 

But it is unclear if all the alliance is truly satisfied with this promise, particularly as smaller NATO nations have not only met their agreements but spend well beyond the 2% limit, including Estonia, Latvia and Lithuania, all of which share a border with Russia.

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The eight other countries that fall short of their spending goals are Croatia, Portugal, Italy, Belgium, Luxembourg, Slovenia and Spain. Iceland is exempt from the 2% commitment as it does not have a standing military.

Ukraine's President Volodymyr Zelenskyy and NATO Secretary General Jens Stoltenberg

Ukraine’s President Volodymyr Zelenskyy and NATO Secretary General Jens Stoltenberg speak during a press conference at the NATO summit in Washington, D.C., July 11, 2024. (AP Photo/Mark Schiefelbein)

ZELENSKYY SAYS PUTIN ‘HATES’ BIDEN AND TRUMP, TIME FOR ‘STRONG DECISIONS’

Several international officials expressed concern this week that the 2% spending commitments agreed upon nearly two decades ago no longer reflect the realistic needs of the alliance in the face of increasingly aggressive authoritarian regimes like Russia, China, Iran and North Korea. 

“We must be clear-eyed about the challenges ahead, and yet not allow fear to make us waver. We are at an inflection point. The choices we make now will decide the future of Ukraine, Europe and this alliance,” Lithuanian Foreign Minister Gabrielius Landsbergis said Thursday. “Ukrainians clearly understand the existential nature of this war.

“The rest of us — unfortunately — are still battling with the obstacles of our own creation. We still have to change our peacetime mentality and finally make our spending on defense reflect the threat we face.”

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In an interview with John Roberts, the co-anchor of “America Reports,” Finnish President Alexander Stubb noted, “I would actually like to give Trump credit because I think he was right on the 2% limit. And, look, in 2014, out of the allies, only three reached that level. I think in 2018 it was something like ten. Now it’s 23. Would that have happened if Trump hadn’t pushed for it? I don’t think so. Would it have happened without circumstance? Probably not.”

U.K. Defense Secretary John Healey, who was appointed just one week ago after a landslide election for the Labour Party, said the new administration would be working to increase NATO spending commitments.

“I think everyone will draw encouragement from the fact that, for the first time, we’ve now got 23 of the 32 nations meeting that 2%. We’re pushing towards 2.5%,” Healey said in reference to the U.K.’s current spending. “I think any assessment of the growing threats that we face and the global instability suggests that all NATO nations are going to need to do more than simply 2%.”

On Thursday, Biden championed other efforts he’s made to strengthen NATO, like adding Finland and Sweden to the alliance. 

“Foreign policy has never been his strong point. And he seems to have an affinity to people who are authoritarian,” Biden said in reference to Trump.

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Trump and Biden side by side photo

Donald Trump challenged President Biden to a golf match and vowed to donate $1 million to charity if he loses. (Getty Images)

Speaking at a news conference following the NATO summit, Biden told reporters, “I’m not having any of my European allies come up to me and say, ‘Joe, don’t run.’ 

“What I hear them say is, ‘You’ve got to win. You can’t let this guy come forward. He’d be a disaster. He’d be a disaster.’” 

When pressed by Fox News about sentiment toward the U.S. presidency among allied nations, Stoltenberg said, “NATO is the most successful alliance in history because we have been able to stay out of domestic politics.

“It’s not for NATO to have any opinion about who is going to be elected as next president or prime minister in an allied country.”

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