Another day, another alleged fraudulent investment scheme. Two men, Paul Greenwood and Stephen Walsh, were arrested and charged Wednesday with misappropriating more than $550 million in client funds in what prosecutors allege was a commodities trading and investment scam. Here’s a copy of the criminal complaint. They were charged with conspiracy, securities fraud and wire fraud. The men were principals at a broker dealer called WG Trading Co. LP, which had offices in New York, Connecticut and New Jersey. Prosecutors have alleged that Greenwood and Walsh solicited funds between 1996 and February 2009 from institutional investors, who were then offered the opportunity to invest through different mechanisms.
So why the teddy-bear picture? We though you might ask. In a separate civil complaint, the SEC alleges that Walsh and Greenwood used client funds invested in WG Trading as “their personal piggy-bank to furnish lavish and luxurious lifestyles, which include the purchase of multi-million dollar homes, a horse farm, cars, horses, and rare collectibles such as Steiff teddy bears.”
Neither Walsh nor Greenwood — nor either representatives for either man — could be reached for comment. They were slated to be arraigned Wednesday afternoon.
Update:
Lawyers for Walsh and Greenwood declined to comment Wednesday afternoon. Greenwood is being repped by Dechert’s Robert Jossen; Walsh by Morvillo Abromowitz’s Richard Weinberg.
Source: WSJ Law Blog
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.....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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