Pitt could lose $65 million in financial scheme

Two investors sued by Pitt and Carnegie Mellon University last week have been accused of… Two investors sued by Pitt and Carnegie Mellon University last week have been accused of misappropriating more than $500 million. Federal agents accused Paul Greenwood and Stephen Walsh, whom the universities filed a complaint against last Friday, of $553 million in securities and wire fraud from about 1996 to this February. The two were working for Westridge Capital Management Inc., based in Delaware. They are accused of using the money to buy rare books, horses, teddy bears ‘mdash; valued at as much as $80,000 ‘mdash; and a home for Walsh’s ex-wife. Pitt invested an estimated $65 million in Westridge Capital Management and its partners, according to the Securities and Exchange Commission, which is also filing a suit against Greenwood and Walsh. Pitt vice chancellor of public affairs Robert Hill and CMU spokeswoman Teresa Thomas released a joint statement last Friday saying that the universities had called for a temporary restraining order against Greenwood and Walsh. Thomas said in the statement that there was ‘insufficient information available’ to determine how much money CMU had invested with Westridge Capital. An article in the Pittsburgh Post-Gazette estimated that the two universities had a combined $114 million invested in the company, meaning CMU would have invested $49 million. Pitt spokesman John Fedele said yesterday that he couldn’t comment on the situation apart from releasing Hill’s statement. ‘With [Friday’s] court filing, the universities are taking appropriate steps to secure the return of any of their investment assets that may have been placed in jeopardy,’ said Hill, in the statement. The statement said Pitt and CMU will seek full disclosure of their financial interests and a freeze on the defendants’ assets. Earlier this month, the National Futures Association, a self-regulatory organization that evaluates the integrity of investment companies, suspended Greenwood and Walsh from its membership, because the two failed to disclose financial information that the association had requested. Westridge Capital Management and the entities associated with it also face lawsuits filed by the Commodity Futures Trading Commission. Westridge Capital Management operated as a commodity pool, where a group of institutions may join to invest funds. The company offered various types of investments and interests for investors to purchase, according to the lawsuit filed by the United States. Greenwood and Walsh transferred money from the investments to their own bank accounts or the accounts of their family members, said the lawsuit.