Paul Greenwood, the hedge fund manager who pleaded guilty yesterday to conspiracy and securities fraud, settled civil claims brought by the U.S. Securities and Exchange Commission.
Greenwood, the former general partner of WG Trading Co., agreed to refrain from violating securities laws and to pay yet- to-be determined disgorgement and penalties, the SEC said in a statement. U.S. District Judge George B. Daniels in Manhattan entered the judgment against Greenwood today, the SEC said.
Greenwood and Steven Walsh, his fellow manager of WG Trading and WG Investors, were indicted last July on charges that they conspired to defraud investors of $554 million. The U.S. said the scheme stretched from 1996 until their arrest in February 2009. A prosecutor said yesterday that Greenwood will testify against Walsh at trial.
Fred Hafetz, Greenwood’s lawyer, said he had no comment on the SEC settlement.
According to his plea agreement, Greenwood will have to forfeit at least $331 million to the government, representing the money he and Walsh obtained from their securities and wire fraud. Greenwood also agreed to pay the U.S. an $83.5 million judgment, the proceeds he “personally obtained” as a result of the fraud.
The case is SEC v. WG Trading Investors, 09-1750, U.S. District Court, Southern District of New York (Manhattan).