2 Money Managers Charged With $550 Million Fraud

Paul Greenwood, 61, of North Salem, New York and Stephen Walsh, 64, of Sands Point, New York and both principals of WG Trading Company, a money management firm based in Greenwich, Connecticut and Westridge Capital Management, based in Santa Barbara, California, were charged today with conspiracy, securities fraud and wire fraud in connection with an alleged investment fraud scheme that bilked investors out of as much as $550 million over many years. According to prosecutors, the two, who were once part owners of the New York Islanders professional hockey team, allegedly used client money as "their personal piggy-bank" to fund lavish lifestyles. Further, the complaint alleges the scheme began in 1996 and continued to this month. Of the $667 million that clients invested, Greenwood and Walsh misused at least $554 million, the complaint alleges. Greenwood and Walsh are alleged to have used company funds to buy horses and pay for personal expenses ranging from Manhattan apartments to expensive collectibles. A former WG Trading employee, Mark Bloom, who now operates North Hills Management LLC was also arrested yesterday on fraud charges.

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