Final distribution in WG Trading case to take total compensation to victims to over $1bn

Maria Nikolova

The court-appointed receiver has commenced the final distribution to investors in connection with the SEC’s action against WG Trading.

The United States Securities and Exchange Commission (SEC) today announced that the court-appointed receiver has begun the final distribution to investors in connection with the SEC’s action against defendants Paul Greenwood, Steven Walsh, and their affiliated WG Trading entities. Upon completion of this final distribution, over $1 billion will have been returned to affected investors, representing 100% of their net principal investments.

The SEC charged Walsh, Greenwood, and their affiliated entities with orchestrating a brazen investment fraud involving the misappropriation of investor assets. The U.S. Commodity Futures Trading Commission filed related charges against the defendants at the same time.

The SEC obtained emergency relief and, ultimately, judgments against the defendants, and Walsh and Greenwood pleaded guilty in parallel criminal actions based on the same underlying conduct. The court-appointed receiver in this matter, Robb Evans & Associates, LLC, has made four previous distributions to injured investors: in December 2010, in April 2011, in April 2013, and in October 2015. This final distribution was approved by the court on August 24, 2020.

The SEC’s complaint alleged that Paul Greenwood and Stephen Walsh promised investors that their money would be invested in a stock index arbitrage strategy. Instead, Greenwood and Walsh essentially treated their clients’ investments as their personal piggy bank to purchase multi-million dollar homes, a horse farm and horses, luxury cars, and rare collectibles such as Steiff teddy bears.

According to the SEC’s complaint, Greenwood and Walsh have been orchestrating the fraudulent investment scheme through their affiliated entities since at least 1996. The SEC alleged that they solicited a number of institutional investors, including educational institutions and public pension and retirement plans, by promising to invest their money in an “enhanced equity index” strategy that involves purchasing and selling equity index futures and engaging in equity index arbitrage trading. However, Greenwood and Walsh have been misappropriating hundreds of millions of dollars of investor funds for their personal use instead of investing the money in the enhanced equity index strategy.

In fact, Greenwood and Walsh misappropriated as much as $554 million of the $667 million that Westridge clients invested in WGTI.

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