CFTC seeks final judgments in 10-year old lawsuit against investment scammers

Maria Nikolova

CFTC requests final judgments in its lawsuit targeting Paul Greenwood and Steven Walsh, accused of operating $1.3 billion investment scam.

The United States Commodity Futures Trading Commission (CFTC) is seeking to bring to a close its action against Stephen Walsh and Paul Greenwood. Back in 2009, the regulator accused the duo of fraudulently soliciting approximately $1.3 billion from individuals and entities through Westridge Capital Management, WG Trading Investors, LP, and other entities.

On November 12, 2019, the CFTC filed proposed final judgments against the defendants.

Regarding Greenwood, the CFTC requests that Permanent Injunction previously entered by the New York Southern District Court Court on July 28, 2010, will constitute the final judgment against Greenwood in favor of the Commission.

The Commission notes that a forfeiture money judgment was entered against Greenwood in a parallel criminal proceeding in the amount of $83,500,000, constituting the total proceeds he personally received as a result of the felony violations to which he pled guilty. The CFTC has withdrawn its claims for any further relief.

Regarding Walsh, the CFTC proposes that the Permanent Injunction previously entered by the Court on August 20, 2014, will constitute the final judgment against him in favor of the Commission.

A forfeiture money judgment was entered against Walsh in a parallel criminal proceeding in the amount of $50,743,779, constituting the total proceeds he personally received as a result of the felony violation to which he pled guilty. The CFTC has withdrawn its claims for any further relief.

The CFTC’s complaint alleged that the defendants solicited funds from commodity pool participants. The defendants defrauded victims by falsely depicting that all pool participants’ funds would be employed in a single investment strategy that consisted of index arbitrage. However, pool participants’ funds were transferred to another entity from which Walsh and Greenwood siphoned funds.

According to the complaint, to cover-up their misappropriation of pool participants’ funds, Greenwood and Walsh manufactured promissory notes to present the appearance that pool participants’ funds had been loaned to them.

Walsh and Greenwood allegedly misappropriated approximately $553 million in pool participants’ funds. More than $160 million was used for Walsh and Greenwood’s personal expenses, including purchasing rare books, horses, Steiff teddy bears for as much as $80,000, and a $3 million residence for Walsh’s ex-wife.

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