SEC charges two over $500m "brazen" fraud

US regulator has taken emergency action to charge two New Yorkers with embezzling $500 million on luxury homes and goods

WASHINGTON, DC - The Securities and Exchange Commission (SEC) has charged two New York men with a "brazen investment fraud" and the misappropriation of $554 million in investor assets. The US regulator took emergency action to freeze the assets of Paul Greenwood and Stephen Walsh, and their three affiliated firms.

The SEC alleges the two promised investors their money would be invested in a stock index arbitrage strategy. Instead, they are alleged to have used the $554 million fund to buy million-dollar homes, a horse farm, luxury cars and even rare antique Steiff teddy bears.

Scott Friestad, deputy director of the SEC's enforcement division, said: "Today's emergency action shows that the Commission will act decisively to put a stop to ongoing fraudulent investment schemes and preserve assets for investors."

Unregistered investment vehicle WG Trading Investors and WG Trading Company, Limited Partnership, which is a registered broker-dealer, have had their assets frozen, as has Westridge Capital Management, a registered investment adviser.