Invoice Hwang nonprofit noticed belongings soar by $100M 2 years earlier than market meltdown
A charity founded by Bill Hwang, a longtime finance manager put on trial for a round of trading that rocked the market, saw its wealth surge by more than just two years before the Wall Street collapse $ 100 million.
The new 990 Hwangs Grace and Mercy Foundation’s 2019 tax returns, which were not reported because they were only recently released by the Internal Revenue Service, provide the most up-to-date insight into Hwang’s financial resources. His family mutual fund, Archegos Capital Management, is reportedly under investigation by the Securities and Exchange Commission for its latest round of trading that rocked the market earlier this year.
Archegos Capital’s leveraged bets on ViacomCBS exploded. In late March, this sparked a wave of forced liquidations of Hwang’s stock positions at a number of Wall Street banks that ended up being worth at least $ 20 billion. Discovery’s stock also suffered a major slump.
The banks involved in the transactions were reportedly investigated by the Justice Department. Senator Sherrod Brown, D-Ohio – the chairman of the Senate’s powerful banking committee – had previously asked financial institutions associated with the Archegos meltdown to provide details on their relationships with the Hwang Family Office.
CNBC asked Hwang’s PR team in April if the charity could provide a copy of their 2019 disclosure form, which had not been released at the time. Hwang’s charity refused to provide the documents.
The Hwang press team did not return a request for comment to CNBC prior to the release of this story.
The new documents show the nonprofit had a net worth of just over $ 580 million in 2019, compared with a value north of $ 470 million at the end of the previous year. According to the disclosure, the market value of all charitable assets at the end of 2019 was over $ 630 million. The 501 (c) (3) ‘s nonprofit assets also rose significantly to just under $ 570 million from just over $ 500 million a year ago.
While using stocks to fund charities isn’t illegal, 2019 was another year that Hwang seemed to be using his financial acumen to bolster his charity’s finances.
Hwang, who is listed as the foundation’s director, contributed $ 14 million worth of Amazon shares to the nonprofit this year. Hwang contributed just over $ 27 million worth of Amazon shares to the nonprofit in 2018. There’s also a list of offshore fund sales in 2019, just like the year before. Amazon’s stock price is currently valued at over $ 3,500 with a market cap of just over $ 1.8 trillion.
Forbes reported that Hwang has donated $ 591 million to his foundation since 2006 through the end of 2018. In 2019, the foundation itself donated over $ 22 million to various outside groups, including $ 1 million to the George W. Bush Presidential Center.
Also noteworthy is the increase in legal fees the charity paid in 2019. That year, the charity paid over $ 200,000 in legal fees compared to 2018 when it spent around $ 40,000 on legal services.
Two of the companies featured in the latest financial reports have advisors who help charities, according to their websites. However, the Hwang Foundation paid more than $ 3,000 that year to what is referred to as the “US Department of Homeland Security Legal” in the new disclosure.
In 2019, the Department of Homeland Security had several leaders under then-President Donald Trump. Though it’s unclear why the foundation paid legal fees to the Department of Homeland Security, it came the same year that Trump and his administration tightened their strict immigration policies.
According to Newsweek, over 900,000 people were arrested or deemed illegitimate on the U.S.-Mexico border in fiscal year 2019 [ICE] this year alone was responsible for the deportation of over 265,000 people.
Hwang, who immigrated from South Korea after high school according to The Wall Street Journal, saw his charity also pay an immigration law firm just over $ 14,000 two years ago. Judy Chang Law Firm says on their website that their services include helping clients obtain green cards, student visas, and EB-1, also known as first-preference employment-based visas.
The Department of Homeland Security and Judy Chang Law Firm did not respond to requests for comment on how they specifically helped Hwang’s nonprofit organization.