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By Jonathan Stempel

NEW YORK (Reuters) -Bill Hwang, the founder of Archegos Capital Management, should spend 21 years in prison for running a market manipulation scheme that wiped out his $36 billion firm and cost its lenders more than $10 billion, federal prosecutors said on Friday.

In a late night court filing, prosecutors from the U.S. Attorney’s office in Manhattan also asked that Hwang be subjected to a $12.35 billion forfeiture and to pay restitution to victims at his scheduled sentencing on Wednesday.

A 21-year term would be unusually long for a U.S. white-collar crime case, and just four years shorter than FTX cryptocurrency exchange founder Sam Bankman-Fried received in March after being convicted of stealing billions of dollars from customers.

Prosecutors called Hwang an “unrepentant recidivist” who appears to have “judged himself blameless.”

They cited a 2012 guilty plea to wire fraud by Hwang’s former hedge fund Tiger Asia Management, and a Nov. 8 request by Hwang’s lawyers that their 60-year-old client spend no time in prison for his activities at Archegos.

“Bill Hwang used his personal hedge fund to commit a fraud that altered the American stock market and visited billions of dollars in losses on his trading counterparties,” prosecutors said. “He pursued that fraud even after previously being ordered not to commit securities fraud. And even now he has no remorse.”

A significant sentence, prosecutors added, would “signal to even the most hubristic investors that their grand schemes will be met with serious sentences.”

Lawyers for Hwang did not immediately respond to requests for comment outside business hours.

Hwang was convicted in July on 10 criminal charges including securities and wire fraud and racketeering conspiracy.

Prosecutors accused him of lying to banks about Archegos’ portfolio so he could borrow money aggressively and make concentrated bets on media and technology stocks such as ViacomCBS, through so-called total return swaps.

Hwang amassed $160 billion of exposure to stocks but could not meet margin calls as prices began falling.

This led to Archegos’ demise in March 2021 and caused big losses for banks such as Credit Suisse, now part of UBS, and Nomura Holdings as various banks unloaded stocks backing Hwang’s swaps.

Hwang did not testify at his two-month trial. He is expected to appeal his conviction.

In requesting that he serve no prison time, Hwang’s lawyers said prosecutors did not and could not prove that Hwang’s alleged lies caused losses for banks. They said Hwang’s age, cardiovascular disease, philanthropy and low risk of recidivism also weighed against putting him behind bars.

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• More than half of the stock market’s post-Trump-election rally has been erased.

• The turning point came Thursday, when Fed Chair Powell said the central bank will take its time cutting rates.

• That, plus a streak of strong economic data, has investors questioning whether a December cut is necessary.

And just like that, half of the stock market’s euphoric post-Trump-election gain is gone.

Major US indexes sold off sharply on Friday, with the tech-heavy Nasdaq leading the way, as investors came to terms with the fact that they may not get a December rate cut as previously expected.

The turning point came on Thursday, when Federal Reserve Chair Jerome Powell said he and the central bank are in no hurry to cut rates, given the positive signals being sent by the economy.

Stocks turned lower in afternoon trading, and that pressure continued through Friday. The S&P 500 fell as much as 1.6%, and has now given back more than half of its torrid 4% post-election gain. The Nasdaq Composite dropped 2.7% at intraday lows.

The S&P 500 fell 2.2% this week, while the Dow Jones industrial average lost 1.2% and the Nasdaq slid 3.2%.

The losses have come as the odds for a 25-basis-point rate cut in December have fallen. Investors are now pricing in a 58% probability of one at the next meeting, down from around 80% before Powell’s address, according to the CME FedWatch Tool.

The comments from the central-bank head come amid a promising streak of US economic data. On Friday, retail-sales data showed signs of strength, and on Thursday, jobless-claims figures came in surprisingly light.

Stock investors have been grappling with what Trump will ultimately mean for the market now that the dust is settling on a buy-everything rush. Concerns have been raised around whether Trump’s protectionist trade policies will drive inflation higher, possibly necessitating eventual rate hikes.

Until now, investors had seemed content to focus on Trump plan to cut taxes and deregulate. But it now seems that Jerome Powell has given them something else to think — and worry — about.

Here’s where US indexes stood at the 4 p.m. closing bell on Friday:

Here’s what else is going on:

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