Bill Hwang
Bill Hwang, founder and co-CEO of Archegos Capital Management.

Christian Multibillionaire Loses Fortune; at Center of Wall Street Fiasco

By Julie Roys

A multi-billionaire, who’s a trustee at Fuller Seminary and has given millions to Christian ministries and schools, has lost his fortune in a matter of days and now is at the center of a major Wall Street fiasco.

Bill Hwang, founder and co-CEO of Archegos Capital Management, quietly built a multibillion-dollar empire using derivatives—risky investments that speculate on which direction the market will go.

Last week, the market turned in the opposite direction from how Hwang had bet. And now Hwang is at the center of what Bloomberg calls “one of the biggest margin calls of all time—a multibillion-dollar fiasco involving secretive market bets that were dangerously leveraged and unwound in a blink.”

According to Bloomberg, Hwang’s portfolio was worth at least $10 billion. But Hwang reportedly leveraged as much as $50 billion, or even more than $100 billion.

Last week, Hwang defaulted on margin calls, which triggered a fire sale of stocks, according to sources who spoke to Reuters.

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Speaking of Hwang’s losses, Mike Novogratz, a career macro investor told Bloomberg: “I’ve never seen anything like this—how quiet it was, how concentrated, and how fast it disappeared. . . . This has to be one of the single greatest losses of personal wealth in history.”

Breaking their silence late Monday, Archegos said through its spokesperson Karen Kessler: “This is a challenging time for the family office of Archegos Capital Management, our partners and employees. All plans are being discussed as Mr. Hwang and the team determine the best path forward.”

Though Hwang, the son of a Korean pastor, billed his investment firm as an outgrowth of his Christian faith, Hwang has history of illegal trading.

In 2012, the Securities and Exchange Commission (SEC) charged Hwang with making $16.7 million in illicit profits through trading schemes involving Chinese bank stocks. To settle those charges, Hwang and his firms agreed to pay $44 million.

Hwang then turned his hedge fund business, called Tiger Asia Management, into a family office, and launched Archegos Capital Management.

In a promotional video for Fuller Seminary posted in 2018, Hwang said his Christian faith guided his investment strategy at Archegos.

“We see how God is leading the whole world, and human race, through these companies . . . ” Hwang said. “I’m like a little child looking for, ‘What can I do today, where can I invest to please our God? You remember Jesus saying, ‘My Father is working therefore I am working?’ So, God is working. Jesus is working. And I’m working.”

The Roys Report reached out to Fuller Seminary for comment about Hwang, but the seminary did not immediately respond.

Hwang and his wife, Becky, also ran a foundation, called the Grace and Mercy Foundation, which gave away millions annually to dozens of Christian ministries, including Fuller Seminary, The King’s College, International Justice Mission, Museum of the Bible, and the Fellowship of Christian Athletes.

The foundation also gave more than $1 million to the now-scandal ridden Ravi Zacharias International Ministries in 2017, and gave $255K in 2018, according to tax documents.

Given Hwang’s history of wrongdoing, many in the business world are asking how Hwang was allowed to risk so much money without being stopped by the Securities and Exchange Commission or regulators around the world.

One possible answer is that Hwang established his business as a family office. These offices don’t normally have to disclose their owners, executives, or how much they manage to the SEC. Hwang also used to derivatives to gain large stakes in companies, which also allowed him to avoid disclosure.

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29 thoughts on “Christian Multibillionaire Loses Fortune; at Center of Wall Street Fiasco”

  1. I wonder if he viewed his reckless risk-taking as “stepping out in faith”? I’m often intrigued how taking certain risks “in faith” often contradicts wisdom, and can easily lead to others being harmed by our decisions. It’s an interesting question. If I think God is leading me to do something that puts others at risk, is it ethical to act on that?

    1. LMartin, I agree on the subject of your question; it is interesting to think about where faith ends and greed or some other motivation begins. My initial thought is that this was not about faith, but greed. Of course, I am just assuming, because I do not know all the facts or the people behind it.

      My thought is that this is akin to someone shooting someone else and faithfully believing the gun will not go off because God will intervene as opposed to building a church, believing that God will provide the necessary funds as needed. One is faith, the other poorly disguised as faith, is really a “test”.

      Matthew 4:7, “Do not put the Lord your God to the test”.

      1. I’ve been involved, over the past several decades, with a ministry that primarily builds homes for the poor in Mexico. This ministry received a huge donation from a particular donor, that made his donation on the contingency that they would never use debt to finance their ministry expansion. This particular donor made this contingency based on his experience with other Christian ministries who had gotten themselves in trouble by financially “stepping out in faith” and taking on too much debt. I’m sure that over this past year with the strain of Covid and all, this donor’s wisdom saved the ministry a lot of heartache. So I guess even “stepping out in faith” can at a point have excessive risk, which wisdom would guard against. In hind sight, perhaps you would call this type of faith presumptuous.

    2. In a western religious culture where Word Of Faith excesses are what sells books, tv shows and podcasts this is a very good question. These folks ignore many scriptures, including ones that others are posting here. Let me add one more,

      “Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. For the love of money is the root of all kinds of evil. And some people, craving money, have wandered from the true faith and pierced themselves with many sorrows. But you, Timothy, are a man of God; so run from all these evil things. Pursue righteousness and a godly life, along with faith, love, perseverance, and gentleness.” 1 Tim. 6:9

      The reality is that the faith that we are called to have is not for a particular future outcome and certainly not a selfish one! But rather faith is in the character of God. Believing in a next life where everything wrong here is made right and clinging to that even when everything is going wrong in the short term is what it is about. It is not about manipulating God to give you what you want, but choosing to believe regardless of how bad the current circumstances are.

      1. To be sure, the prosperity and Word of Faith movements warrant plenty of critique. But so does the other end of the spectrum cloaked in more ‘theological sophistication’ — i.e., appropriating Kuyperianism to justify “Faith and Work” theology, which, in practical terms, fuels that materialist, rugged individualism, prestige-chasing in the West. Like, of course [name your hedge fund, investment banking firm, white-shoe law firm, et al.] because, even though 100-120 hours a week, His sovereignty is all over my year-end bonuses. The Lord is doing a good thing, indeed!

    3. Headless Unicorn Guy

      I’m often intrigued how taking certain risks “in faith” often contradicts wisdom, and can easily lead to others being harmed by our decisions.

      Often there’s a “Holy Nincompoop” attitude where the more it contradicts wisdom, the more Of God it must be.
      Relying on the Spirit instead of the Flesh and all that.
      This usually does NOT end well.

  2. Note that derivatives are not risky speculations on market direction, but have many important risk-mitigating features. For example, buying a put is insurance against loss in an asset you hold, and farmers regularly use futures to lock in guaranteed prices at harvest time. A straddle or butterfly spread can be used to make a profit if the price moves enough in either direction. Certainly they can be abused, as with naked puts or leveraging too greatly, but please do not feed the false narrative that using derivatives is purely speculative.

    1. Warren Buffett, in his 2002 Berkshire Hathaway shareholder letter, described derivatives as “financial weapons of mass destruction”. Use of derivatives subsequently precipitated the financial crisis of 2008. Look it up.

      1. Headless Unicorn Guy

        Except like in Vegas or a Ponzi scheme you’d better know when to tap out and come out ahead.

        The temptation to stay in the game a little longer for Just One More Big Score often overrides this, keeping them in until one day everything blows sky-high.

  3. The question to ask is which clearing firm – risk official allowed the trade without the proper margin. THATis the question. Derivatives are no more risky than other risk capital based investments. Leverage is its prime feature but regulations are designed to prevent over marginalization as a caution against exactly this. Market shifts are frequent and unprecedented events happen each day, but the regs keep firms from imploding so that other customers are not collateral damage. Where were the regs and risk?

    1. There might not be any regulations applicable here. Maybe it didn’t go through a clearing firm? The big losers besides Hwang’s company seems to be foreign banks, and I haven’t heard that they’re in any danger of going bankrupt because of it. These were special deals between a bank and a big sophisticated customer. What I wonder is why any bank would lend without adequate collateral. These banks are big enough not to need paternalistic regulations to protect them from their own mistakes.

  4. A total fraud. His character. His faith. His love of money. His “investments”. His affinity for corrupt schools. His fruit . . . it shows something.

    Sadly the lessons to be learned here are not going to be applied or heard by many today.

    1. John, what is your source that reveals the schools that this man donated money to are corrupt? Seems like an umbrella statement. Again what are your sources?

  5. Proverbs says…

    “Do not overwork to be rich; Because of your own understanding, cease!

    Will you set your eyes on that which is not? For riches certainly make themselves wings; They fly away like an eagle toward heaven.”

    ‭‭Proverbs‬ ‭23:4-5

  6. Being heavily leveraged is what enabled him to become so wealthy, and then what made it possible to go bust. Live by the sword, die by the sword.

    Fortunately he has cashed in much of his worldly wealth for treasure in heaven, a safer investment than any on earth, but he will still have to answer for any rules he has broken here.

    1. 19 “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. 20 But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. 21 For where your treasure is, there your heart will be also. (Matthew 6)

  7. Where was Hwang getting his religious/spiritual guidance? Was it the Holy Spirit alone? Who did he go to for advice? Did he feel he didn’t need any? I guess I have more questions about Christ and Wall Street.

    1. It brings to mind something our pastor said Sunday. Our hearts are idol factories. Which is why Jesus told us “ If anyone would come after me, let him deny himself and take up his cross daily and follow me.” Luke 9:23

  8. Perhaps the root of his problem is found in this truth; Proverbs 11:28 (ESV): “Whoever trusts in his riches will fall,
    but the righteous will flourish like a green leaf.”

  9. He didn’t necessarily sin at all in this. Losing money is no sin. Rather, the opposite: he held wealth in such low regard that he was willing to risk losing it all in exchange for the possibility of doubling it. It’s not right to criticize somebody for being greedy when they lose money; it makes more sense to criticize them when they invest it safely because they love it so much.

    A caveat, though, is that we may find out he did sin in ways not yet revealed– for example, with failed market manipulation or if he lied to banks that lent him money.

  10. Didn’t Grace and Mercy give RZIM a boat load of money? I believe it was on their 990s? I think RZIM is listed on their webpage.

  11. From Article: ..Hwang said his Christian faith guided his investment strategy at Archegos.

    Maybe God wasn’t pleased with his investments.

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