Stephen Walsh (money manager)

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Stephen Walsh (born 1944) is an American former money manager who pleaded guilty to securities fraud.

Walsh and his business partner Paul Greenwood were arrested on February 24, 2009 for alleged securities fraud of between $550 million and $670 million. Walsh was a principal of Westridge Capital Management Inc. and chief financial executive of WG Trading Company, [1] [2] based in Greenwich, Connecticut. [3] They were charged with scheming to defraud investors of $554 million. [4] The scheme, which lasted from 1996 to 2009, defrauded investors, [3] and involved unauthorized investments and the reporting of "arbitrary return rates" to investors that failed to account for losses. [5] The scheme collapsed following the global financial crisis and a National Futures Association audit that revealed promissory notes used by Greenwood and Walsh to account for losses and withdrawals. [5] From 1991 to 2003, Walsh held a minority stake in the New York Islanders hockey team. [6] [7] Walsh lived in Sands Point on Long Island. [6]

In April 2014, Walsh pleaded guilty in the U.S. District Court for the Southern District of New York with securities fraud, admitting false statements made to his firm's investors. [8] After Judge Miriam Goldman Cedarbaum indicated that she was considering whether to impose a maximum 20-year prison sentence, Walsh considered withdrawing his guilty plea, but ultimately chose not to do so. [9] Later in 2014, Cedarbaum sentenced Walsh to 20 years; [10] Cedarbaum, who had earlier suffered a stroke, mistakenly believed that investors had not been made whole for their losses. [6] On May 8, 2019, Judge Loretta Preska reduced Walsh's sentence by 15 years, granting him immediate release, based on her finding that Walsh had received ineffective assistance of counsel. [6]

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References

  1. ↑ Ax, Joseph (9 January 2015). "Hedge fund exec avoids prison for role in long-running $554 mln fraud". Reuters . Retrieved 22 March 2018.
  2. ↑ Zachery Kouwe, Two Money Managers Held in New Wall Street Fraud Case, New York Times (February 25, 2009).
  3. 1 2 Nate Raymond, Ex-NY Islanders co-owner gets prison term for fraud halved, Reuters (June 29, 2016).
  4. ↑ Patricia Hurtado, Fund Manager Paul Greenwood Pleads Guilty to Fraud, Bloomberg News (July 28, 2010).
  5. 1 2 Elizabeth Ganga, Paul Greenwood sentenced to 10 years for massive fraud, The Journal News (December 3, 2014).
  6. 1 2 3 4 John Riley, Judge takes 15 years off fraud sentence for ex-Islander co-owner Stephen Walsh, Newsday (May 8, 2019).
  7. ↑ Rick Schapiro, Greenfield and Walsh Ran Islanders Right Into the Deep Freeze, New York Daily News (February 26, 2009).
  8. ↑ Christopher M. Matthews, Money Manager Stephen Walsh Pleads Guilty to Fraud Wall Street Journal (April 25, 2014).
  9. ↑ Jonathan Stempel, Financier, 70, facing 20 years prison, to not withdraw guilty plea, Reuters (November 5, 2014).
  10. ↑ Investment Managers Sentenced In Manhattan Federal Court For Several Hundred Million-Dollar Fraud Scheme (press release), U.S. Department of Justice (December 3, 2014).
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