The owners of an investment firm that managed hundreds of millions of dollars for universities and charities were arrested Wednesday by the FBI in the latest white-collar scandal to rock Wall Street. Paul Greenwood, also a horse breeder and elected official in suburban New York, and Stephen Walsh were awaiting an appearance in federal court in Manhattan to face securities and wire-fraud charges alleging they raided funds to buy horses and cover other personal expenses. Court papers identified Greenwood and Walsh as the owners of Greenwich, Connecticut-based WG Trading Company LP and of Westridge Capital Management Inc., based in Santa Barbara, California. Their operation also had offices in Manhattan and Jersey City, New Jersey. The firms' clients included "charitable and university foundations, retirement and pension plans and other institutions," a criminal complaint said. The complaint alleges that since the summer of 2007, $1.3 billion in illegal wire transfers were made to bank accounts held by Greenwood and Walsh's wife. It also cites an interview with an unidentified WG Trading employee who described being instructed to transfer funds to personal bank accounts. The arrests add to a growing list of white-collar defendants facing charges in US District Court in Manhattan, topped by the case of Bernard Madoff, who has pleaded not guilty to masterminding a $50b. pyramid scheme. Other cases include that of Florida hedge-fund owner Arthur Nadel, accused of bilking investors of up to $350 million, and Mark Dreier, a prominent lawyer charged with stealing $400m. in a hedge-fund scam. They also have pleaded not guilty.