Feb. 27 (Bloomberg) -- A U.S. judge put on a hold a lawsuit by two Pittsburgh universities claiming they were defrauded of $114 million by Westridge Capital Management Inc. and its principals, Paul Greenwood and Stephen Walsh.

U.S. District Judge Terrence McVerry stayed the case today, citing civil lawsuits filed by federal regulators in New York after Greenwood, 61, and Walsh, 64, were arrested Feb. 25 and charged with misappropriating $554 million from investors.

McVerry said the lawsuit by the University of Pittsburgh and Carnegie Mellon University, filed Feb. 20, should proceed after cases by the Securities and Exchange Commission and the Commodities Futures Trading Commission are concluded. Pitt claimed losses of $65 million and Carnegie Mellon claimed losses of $49 million.

McVerry had entered an order appointing a temporary receiver and barring Greenwood, Walsh, Westridge and related companies from accepting new customer funds or transferring funds, except for operating or payroll expenses. Judges in the SEC and CFTC entered similar temporary restraining orders, and a temporary receiver was appointed in New York.

In his ruling, McVerry said any orders issued in the New York cases “shall control over” his restraining order.

The criminal case is U.S. v. Greenwood, 09-MAG-502, U.S. District Court, Southern District of New York (Manhattan). The universities’ case is Carnegie Mellon University v. Westridge Capital Management Inc., 09-cv-00215, U.S. District Court, Western District of Pennsylvania (Pittsburgh).

The SEC case is Securities and Exchange Commission v. WG Trading Investors, LP, 09-01750, U.S. District Court, Southern District of New York (Manhattan). The CFTC case is Commodity Futures Trading Commission v. Stephen Walsh, 09-01749, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net.

Last Updated: February 27, 2009 18:05 EST