Updated from 1:06 p.m. ESTFour investment managers were waiting to appear before a federal judge in Manhattan Wednesday, following their arrests on charges of securities fraud in the latest shake-out of alleged investment schemes stemming from the financial crisis. James Nicholson, who heads investment firm Westgate Capital Management, was arrested by Federal Bureau of Investigation agents on charges of alleged securities fraud stemming back to 2004. Separately, Paul Greenwood of Greenwich, Conn.-based WG Trading Co. and Stephen Walsh, of Santa Barbara, Calif.-based Westridge Capital Management, were also arrested for what could be a $550 million financial fraud. Mark Bloom, a former associate of Greenwood and Walsh, was arrested in another separate case, according to the FBI. Nicholson apparently told investors he had $600 million to $900 million in assets under management, while the actual amount was closer to $100 million, according to a complaint by the Department of Justice. While he marketed his funds as having returns that were almost always positive, the actual results were much lower, the Justice Department alleges. Nicholson's alleged scheme unraveled after the Bernard Madoff scandal came to light and several investors made redemption requests, authorities said. About two dozen received checks for a total of $5 million, but all of them bounced, the Justice Department said. Others attempted to redeem over $10 million without success. The Justice Department arrested Nicholson, 42, at his home in New Jersey on Wednesday and charged him with securities fraud and bank fraud. Greenwood, 61, of North Salem, N.Y., and Walsh, 64, of Sands Point, N.Y., were charged with conspiracy, securities fraud and wire fraud. The FBI alleges that from at least 1996, the duo ran a "fraudulent commodities trading and investment advisory scheme," which secured investor funds by marketing a "conservative trading strategy" that had outperformed the S&P 500 Index for more than a decade.