Compass Lexecon, a consulting arm of FTI Consulting Inc., has initiated litigation against Bill Hwang, the founder of Archegos Capital Management, alleging he failed to pay $14.2 million for consulting services connected to his criminal defense.
The lawsuit was filed on Wednesday in federal court in Manhattan. Compass Lexecon claims Hwang did not settle at least nine invoices for services the firm provided in relation to his criminal case.
According to the complaint, Compass Lexecon supplied economist Michael Johannes as an expert witness. Johannes is identified in the filing as a professor at Columbia Business School and a senior consultant with the firm. He testified as the final defense witness on June 27, 2024, stating that many of the stocks cited in the prosecution's case moved for reasons unrelated to the conduct Hwang was accused of.
The lawsuit notes that Johannes billed $1,400 per hour for his work on the defense. Compass Lexecon says its services included market analysis, the preparation of expert disclosures, and trial preparation activities tied to the criminal proceedings.
The suit comes after Hwang was convicted of fraud and market manipulation following the collapse of his $36 billion family office. The collapse produced roughly $10 billion in losses for bank counterparties and was a contributing factor in the failure of Credit Suisse Group AG, the complaint recaps.
As part of his sentence, Hwang was ordered to pay more than $9 billion in restitution. The filings note that at the time he estimated his remaining assets at approximately $55 million.
Hwang has been sentenced to 18 years in prison but remains free on bail while he pursues an appeal of his conviction. The Compass Lexecon action seeks to recover the outstanding consulting fees tied specifically to the defendant’s legal defense work.
The complaint lays out the invoicing and services that Compass Lexecon says remain unpaid but does not, in the sections quoted in court filings, detail any proposed enforcement steps beyond the civil suit. The litigation adds a separate financial claim against Hwang to the array of monetary obligations he faces stemming from the collapse of Archegos and the subsequent criminal prosecution.