Stephen Walsh, the WG Trading Co. money manager charged with conspiring to swindle investors out of $554 million over 13 years, pleaded guilty Friday to securities fraud a few months before his trial.
Mr. Walsh was accused of misappropriating funds from institutional investors that included public pension funds, university foundations and charities between 1996 and 2009. He faces as long as 20 years in prison at his sentencing.
Mr. Walsh was charged in 2009 with Paul Greenwood, former general partner at WG Trading. The two men, former minority owners of the New York Islanders professional hockey team, were accused by securities regulators in a parallel lawsuit of using client funds to pay for a lavish lifestyle. They bought horses, horse farms, automobiles and collectible Steiff teddy bears, according to the Securities and Exchange Commission.
Mr. Walsh entered his plea before U.S. Magistrate Judge Kevin Nathaniel Fox in Manhattan. Greenwood pleaded guilty in 2010 to taking more than $75 million from clients.
“I and others engaged in transactions and practices that operated as a fraud and defrauded investors,” Mr. Walsh said at his plea hearing. He admitted that, as part of the fraud, he issued promissory notes falsely promising to pay a WG entity “tens of millions of dollars.”
