Paul Greenwood, the general partner of WG Trading Co., pleaded guilty to six counts of conspiracy, securities fraud, commodities fraud, wire fraud, and money laundering in New York City federal court for allegedly defrauding investors an approximate total of $544 million. As part of his plea bargain, Greenwood agreed to cooperate with federal authorities against his partner Steven Walsh and to forfeit at least $331 million.
Between 1996 and February 2009, Greenwood and Walsh allegedly conspired and carried out a scheme to defraud institutional investors hundreds of millions of dollars through an “index arbitrage fund” which promised them high interest returns. It was alleged that both conspirators used most of the investments to fund their personal expenses.
Greenwood also purportedly attempted to help conceal trading losses and the conspirators’ misappropriation of investor funds by executing fraudulent promissory notes in favor of WG Investors.
If convicted on all six counts, Greenwood faces a maximum penalty of 85 years in prison and a fine of $16 million.
