How Big Is This Westridge Scam?


How big is the fraud that led to the arrest of money managers Stephen Walsh and Paul Greenwood? The two men are accused of fraud and using client funds for personal use, including buying horses and a house for Walsh’s ex-wife.

Here’s what we know. Since 1996, Walsh and Greenwood reportedly raised around $1.3 billion from investors for Westridge Capital Management, WG Trading Investors LP and other investment vehicles. The Iowa Public Employees Retirement System gave them roughly $330 million to invest. The University of Pittsburgh and Carnegie Mellon University had invested $114 million invested with Westridge. The Pennsylvania School Employees Retirement System was preparing to invest $1 billion with them.

Trouble at the firm first came to light the National Futures Association, an industry regulatory agency, suspended Greenwood and Walsh after they refused cooperate with an audit the association began on February 5.

Westridge Capital Management allegedly “falsely depicted” that all investors’ money would be used in an index arbitrage strategy. But roughly $553 million was instead transferred to another entity from which Walsh and Greenwood siphoned funds, according to the CFTC complaint. Westridge Capital Management completes transactions through WG Trading, its registered investment broker dealer arm.