The easy money theory of fraudulent schemes
This is becoming too much. Yet another fraudulent scheme has been exposed. Paul Greenwood and Steven Walsh were arrested yesterday for stealing $550 million from clients of their managed funds. Their companies were WG Trading Co. and WG Trading Investors LP in Greenwich, Conn., and Westridge Capital Management Inc., based in Santa Barbara, California.1 You will be pleased to know they are out on bail. According to the Wall Street Journal:
Alleged victims include Carnegie Mellon University, which had invested more than $49 million, and the University of Pittsburgh, which put in more than $65 million, court records show. The Iowa Public Employees Retirement System said it had invested about $339 million, or 2% of its portfolio. The Sacramento County Employees’ Retirement System in California said on its Web site that it had invested $89.9 million, or 1.6% of its total fund.
Messrs. Walsh and Greenwood ran their firm since 1996 and claimed to have beaten the S & P 500 every month. They had very lavish lifestyles. Horses, mansions, farms, cars, rare books, and rare teddy bears.
It seems as if there has been an explosion of these schemes. I think I could almost write this script, it’s becoming so familiar. We’ve had Bernie Madoff, Allen Stanford, Marc Dreier, James Nicholson, Joseph Forte and a few others in a relatively short period of time. Why?
… Continue reading The Fed + Easy Money = A Petri Dish of Greed
