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SEC charges duo over "brazen" $554m investment fraud

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The Securities and Exchange Commission (SEC) has obtained an emergency asset freeze against two New York residents and three associated companies it has charged with running a "brazen" $554 million investment fraud.

According to the regulator's complaint, Paul Greenwood and Stephen Walsh solicited money from institutional investors - including educational bodies and public pension funds - with the promise that it would be invested in an "enhanced equity index" strategy.

However, the SEC alleges that they used the cash as their "personal piggy bank" to pay for items including multi-million dollar homes, a horse farm and horses, luxury cars and rare collectibles like Steiff teddy bears.

The SEC has also named three companies - WG Trading Investors, Connecticut-based WG Trading Company and California's Westridge Capital Management - as being part of the scam, which dates back to at least 1996.

James Clarkson, acting regional director of the SEC's New York office, said the enforcement action demonstrates that individuals who defraud investors should expect a "swift and aggressive" response from the regulator.

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