Reuters reports that Paul Greenwood, 61, and Stephen Walsh, 64, are accused of using client money as “their personal piggy-bank” to fund lavish spending including a horse farm, multi-million dollar homes, cars, and payments to a former wife. The two have been charged with conspiracy, securities fraud, and wire fraud.
A criminal complaint filed in U.S. District Court in Manhattan alleged the scheme was long-running, beginning in 1996 and still operating through this month, according to Reuters.
The two also were charged in a separate civil complaint filed by the U.S. Securities and Exchange Commission, which said the men solicited numerous institutional investors, including educational institutions and public pension and retirement plans, by promising to invest their money in an “enhanced equity index” strategy. Of the $667 million that clients invested, Greenwood and Walsh misused as much as $554 million, the SEC said, according to the news report.
Reuters said Greenwood and Walsh had been suspended by the National Futures Association on February 12 for not disclosing their financial records and failing to answer questions on numerous promissory notes that the association said totaled “hundreds of millions of dollars” that they executed.
A former WG Trading employee, Mark Bloom, was also arrested on Wednesday and charged separately in U.S. District Court in Manhattan with fraud related to his activities at his North Hills Management LLC financial firm in New York. The SEC also brought civil charges against Bloom, saying he misused more than $13.2 million of investor funds in part to support a lavish lifestyle.
« IRS Releases Tax Withholding Tables to Reflect Stimulus Bill Provision