SEC halts Albany-based McGinn, Smith & Co’s Fraudulent Scheme

April 30th, 2010
| More
The SEC has filed an emergency enforcement action against Albany-based firm McGinn, Smith & Co., Inc., its co-owners Timothy M. McGinn and David L. Smith, and its affiliates. According to the SEC, Mr. McGinn and Mr. Smith “raised approximately $120 million from investors in more than 25 debt offerings that were not registered with the SEC under the securities laws” and were sold through at least eighteen trusts and four funds. Not only were the two owners aware that the promised interest rates could not be paid to the investors at the end of the terms, the SEC further alleges that the principal of the debt offerings was “used to support their financially troubled or bankrupt entities, to make payroll for MS & Co., and even for their own personal activities such as procuring strippers for a ‘sexually themed’ cruise.”

While the SEC is still investigating the details of the fraud, they have uncovered that a minimum of $80 million is owed to investors of McGinn, Smith & Co.

“McGinn and Smith deceived investors about the true purpose behind these offerings,” stated Associate Director of the SEC’s New York Regional Office Andrew M. Calamari. “They falsely promised investors a profitable payday but secretly siphoned off money for their own payroll.”
For Detailed Investor Profiles on these Investors, click below:
McGinn, Smith & Co
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News


More Recent Headlines

Moore Capital’s Louis Bacon criticizes Greek bailout, predicts euro breakdown

Metals fund manager Mark Thompson to leave Apollo Management in June

Citadel sells $301 million of its E*Trade shares, causing 7.1% fall

Pardus Capital Management recruits European distressed debt expert

Hedge Fund Job Report: Platinum Management, George Weiss & Co and Carlson Capital

Gryphon’s Investment Research Scam halted after fooling investors out of $17.5 million

Amid Push For Renewable Energy, Saudi Arabia Cautiously Turns Over Green Leaf

Bitstream on Shareholder Activist Stage, attracts Raging Capital and Columbia Pacific Advisors

Why Contrarianism Works

UCITS HFS Index continues steady growth in April