Two Accused Greenwich Traders Face Up To 20 Years In Prison And Over 5 Million In Fines
FOR IMMEDIATE RELEASE
Two Investment Managers Arrested on Fraud Charges
NEW YORK -- Lev L. Dassin, the Acting United States Attorney for the Southern District of New York, and Joseph M. Demarest, Jr., the Assistant Director-in-Charge of the FBI's New York Field Division, announced today that Paul Greenwood, 61, of North Salem, N.Y., and Stephen Walsh, 64, of Sands Point, N.Y., were arrested this morning on conspiracy, securities fraud and wire fraud charges
According to a three-count complaint unsealed today in Manhattan federal court, from at least 1996 through February 2009, Greenwood and Walsh ran a fraudulent commodities trading and investment advisory scheme using an entity they controlled called WG Trading Investors. Through a marketer, Greenwood and Walsh solicited investor funds on the understanding that they would invest the funds in a program called "enhanced stock indexing," which they represented was a conservative trading strategy that had outperformed the results of the S&P 500 Index for more than 10 years.
Several institutional investors -- including charitable and university foundations, retirement and pension plans and others -- invested more than $668 million through WG Trading Investors, receiving in exchange promissory notes issued by WG Trading Investors that the defendants represented would pay interest at a rate equal to the investment returns earned by the enhanced stock indexing strategy.
Contrary to their representations to their investors, Greenwood and Walsh are alleged to have misappropriated the majority of the investor funds. Among other things, Greenwood is alleged to have used the funds to purchase expensive collectible items and horses, as well as for other personal expenditures. Walsh is alleged to have misappropriated investor funds for himself, and to have made large cash payments to his ex-wife.
Both Greenwood and Walsh executed promissory notes in favor of WG Investors with respect to the investor funds they misappropriated and to conceal trading losses. These promissory notes totaled approximately $293 million for Greenwood and approximately $261 million for Walsh.
In February 2009, the National Futures Association (NFA) conducted an audit of WG Investors and related entities. In the audit, the NFA discovered that of approximately $812 million purportedly on the books of WG Investors, more than $794 million was booked as receivables due from Greenwood and Walsh and investments in entities that they controlled.
The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Greenwood and Walsh surrendered this morning to the FBI and are expected to be presented today before United States Magistrate Judge Douglas F. Eaton in Manhattan federal court.
Greenwood and Walsh are each charged with one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud and one count of wire fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense.
Mr. Dassin praised the investigative work of the FBI in this case, and thanked the Securities and Exchange Commission, the United States Commodity Futures Trading Commission and the NFA for their assistance. He added that the investigation is continuing.
Assistant U.S. Attorneys John J. O'Donnell, Jessica A. Roth and Amy Lester are in charge of the prosecution.
U.S. Department of Justice
PLEASE SEE:
Greenwich Time Managing Editor Bruce Hunter Had Better Get MOOOOOVING......
CattleNetwork.com, KS
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today charged Stephen Walsh
GREENWICH FRAUDSTERS, PAUL GREENWOOD AND STEPHEN WALSH NOT ONLY MISMANAGED INVESTORS MONEY AT WG TRADING THEY MISMANAGED THE NEW YORK ISLANDERS TOO
From at least 1996, Walsh and Greenwood raised roughly $1.3 billion from investors....
BY Thomas Zambito
DAILY NEWS STAFF WRITER
DAILY NEWS STAFF WRITER
Two former members of the New York Islanders' infamous Gang of Four ownership group were arrested on securities fraud charges today for swindling top-flight universities out of hundreds of millions of dollars.
You Won't Read This In The Greenwich Time, The Greenwich Citizen Or The Greenwich Post ......
Here Is A Picture Of Greenwich Fraudster Paul "I am Not Cooperating With No Stinking Audit" Greenwood Who Is Now Under Arrest
NEW YORK - The FBI says the operators of a Connecticut-based firm company have been arrested in New York on securities fraud charges.
Paul Greenwood and Stephen Walsh, principals of WG Trading Company LP, were awaiting a federal court appearance in Manhattan on Wednesday.Earlier this month, a regulatory agency for the U.S. futures industry suspended Greenwood and Walsh, accusing them of refusing to answer questions about the transfer of $350 million to another fund.
Do We Have A Mini-Bernie Madoff Ponzie SchemeRight Here In Greenwich?
THE HEADLINES:
YOU THOUGHT FAIRFIELD GREENWICH GROUP WAS BAD:
What About WG Trading?
Paul Greenwood And Stephen Walsh Make Greenwich Resident Walter "Feeder Fund" Noel Look Like A Boy Scout
University of Pittsburgh and Carnegie Mellon University files Federal lawsuit against Greenwich Traders Paul Greenwood and Stephen Walsh
Pitt and CMU have also notified the Securities and Exchange Commission and the Commodities Futures Trading Commission About Greenwood And Walsh
THE QUOTE:
"We don't want to talk with you. Why would we want to talk to a reporter," said a woman at Paul Greenwood's Westchester, N.Y., home who identified herself as his wife.
THE STORY:
Pittsburgh Post-Gazette
.....The MRA suspends Greenwood and Walsh from NFA membership indefinitely. The MRA also prohibits Greenwood and Walsh or anyone acting on their behalf from soliciting or accepting any customer or pool participant funds and they are prohibited from placing trades for any pools that they operate or control except to liquidate existing positions. Additionally, the MRA prohibits them from disbursing or transferring any funds from any accounts which either of them own, control or which are held in either of their names without prior approval from NFA......
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