MANHATTAN (CN) – The former chief compliance officer at a Connecticut securities firm helped misappropriate $554 million of investors’ money which was supposed to be invested in a virtually “risk free” investment fund, the SEC claims in Federal Court. Deborah Duffy, of Greenwich-based WG Trading Co., pleaded guilty Tuesday in a separate federal case to conspiring to commit securities fraud and wire fraud.
Federal prosecutors accused Duffy of assisting the firm’s general partners in a scheme to defraud investors between 1996 and February of this year.
Duffy pleaded guilty to helping the partners take $131 million intended for investment and using the money for their own benefit.
In its lawsuit, the SEC puts the total amount of the fraud at $554 million. According to the complaint, Duffy helped WG Trading’s general partners use the half-billion-dollar kitty as their “personal piggy bank” to “furnish lavish and luxurious lifestyles.”
In entering her guilty plea in the criminal case, Duffy agreed to cooperate with federal prosecutors.
Prosecutors said victims of the fraud include large institutional investors, including several public pension funds, and educational institutions and endowments.
Duffy’s sentencing on the criminal charges is scheduled for Jan. 21.