New York, NY – April 21, 2011 – Investors in a commodity pool defrauded by Paul Greenwood and Stephen Walsh are beginning to receive approximately $792 million in recovered funds, according to a court order issued by the U.S. District Court for the Southern District of New York (SDNY) on March 21, 2011. The distribution, overseen by court-appointed Receiver Robb Evans & Associates, LLC, represents nearly 85 percent of approved claims.
Greenwood, of North Salem, New York, and Walsh, of Sands Point, New York, were initially charged by the CFTC in February 2009 with orchestrating a $1.3 billion Ponzi scheme. The scheme misappropriated at least $553 million from participants in commodity pools associated with entities like Westridge Capital Management, Inc., WG Trading Investors, LP, and WGIA, LLC.
The CFTC’s complaint alleges Greenwood and Walsh operated a fraudulent investment scheme. The Securities and Exchange Commission (SEC) also pursued a related civil action. The current distribution plan, approved by both the CFTC and SEC, prioritizes institutional investors including state and county pension funds, private pension funds, and university foundations.
On July 28, 2010, the SDNY issued a permanent injunction against Greenwood, holding him liable for futures fraud and misappropriation of funds. The court will determine the amount of disgorgement and civil monetary penalties at a later date. Greenwood also pleaded guilty to related criminal charges in USA v. Greenwood et al, Case No. 1:09-CR-722 (MGC).
The CFTC’s civil litigation continues against other defendants and relief defendants in the matter. The agency acknowledged the assistance of the National Futures Association, the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the SEC in the investigation.
Source: CFTC.gov
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