Four Fund Managers Charged With Securities Fraud

[jannyk]

Source: Bloomberg

Two officers of WG Trading, a broker- dealer based in Greenwich, Connecticut, were charged with conspiracy in what authorities called a $550 million securities- fraud scheme dating to 1996. The two, Paul Greenwood and Stephen Walsh, were among four suspects arrested today by the Federal Bureau of Investigation after three securities-fraud complaints were unsealed in U.S. District Court in New York, said Jim Margolin, an FBI spokesman.

The scheme continued until Feb. 6, when the men obtained a $21 million investment from the University of Pittsburgh, according to the U.S. Securities and Exchange Commission, which also sued the men for fraud. The University of Pittsburgh and Carnegie Mellon University, also located in Pittsburgh, sued the men Feb. 20, claiming they misrepresented their trading in commodity futures contracts, leading to $114 million in investment losses.

The men “defrauded their investors by misrepresenting and/or omitting the material amount and nature of the assets under investment,” according to the complaint. The University of Pittsburgh claims it lost $65 million; Carnegie Mellon, $49 million.

Of $667 million invested in WG Trading Investors, Greenwood and Walsh misappropriated as much as $554 million, according to the SEC complaint. They used investors’ money on lavish lifestyles that include multimillion-dollar homes, a horse farm, cars, horses and collectibles such as Steiff teddy bears, according to the SEC.

A third man, James Nicholson, 42, founder of Westgate Capital Management, was taken into custody by FBI agents. He was accused of conducting a scheme dating to 2004. Fourth Arrest - Mark Bloom of New York, who once worked for Greenwood and Walsh and now heads his own firm, was also arrested, the FBI’s Margolin said.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a4AsARQdf3eY&refer=home

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How many is that so far?

[whosinpower]

1. How many indeed

Seems to me that the securities fraud, ponzi schemes and all that that have somehow surfaced in the past few months......did the FBI get new working orders?

When Bush was in office - how many of these stories surfaced????

[aquart]

2. Did we have the brains to freeze their assets, like Venezuela did?

[avaistheone1]

4. I hope that is the first thing the authorities would do.

It seems like common sense, but that seems to be in short supply these days.

[dipsydoodle]

3. Not enough by far

x(

[NashVegas]

5. Oh, It's Just Not the Same w/out the Photo

http://www.bloomberg.com/apps/data?pid=avimage&iid=igajPNMzKXMs

[Optical.Catalyst]

6. Paul Greenwood gave money to the Bush 43 campaign

Paul Greenwood gave $2000 to Chimpy in 2004.

Stephen Walsh gave $500 to AlFonse D'Amato in 1998

James Nicholson gave $2000 to Rudolph Giuliani in 2007

[maddezmom]

7. kick

[RamboLiberal]

8. Pitt, CMU money managers arrested in fraud

Source: Pittsburgh Post-Gazette

Two East Coast investment managers sued for fraud by the University of Pittsburgh and Carnegie Mellon University misappropriated more than $500 million of investors' money to hide losses and fund a lavish lifestyle that included purchases of $80,000 collectible teddy bears, horses and rare books, federal authorities said yesterday.

As Pitt and Carnegie Mellon were busy trying to learn whether they will be able to recover any of their combined $114 million in investments through Westridge Capital Management, the FBI yesterday arrested the corporations' managers.

Paul Greenwood, 61, of North Salem, N.Y., and Stephen Walsh, 64, of Sands Point, N.Y., were charged in Manhattan -- by the same office prosecuting the Bernard L. Madoff fraud case -- with securities fraud, wire fraud and conspiracy.

Both men also were sued in civil court by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, which alleged that the partners misappropriated more than $553 million and "fraudulently solicited" $1.3 billion from investors since 1996.



Read more: http://www.post-gazette.com/pg/09057/951834-298.stm