Tags: assholes, erotic vacations at sea, it was supposed to be a surprise, SEC, sexually themed cruises, Strippers, too much, where do you get off
Listen. I get the SEC has to make up for their many, many past fuck-ups. And some people’s scams are actually worthy of being shut down, especially when whoever is running it is spending his/her ill-gotten gains on entirely selfish purchases that will make only them happy and no one else. But what of the con-artists who, while perhaps not running the most legit shops, are taking whatever money they’ve stolen and using it to spread joy far and wide in the form of, for instance, “sexually themed cruises”? Apparently the SEC sees no distinction when, to us, it’s black, white and wearing boob tassels.
The Securities and Exchange Commission today filed an emergency enforcement action to halt a fraudulent scheme being orchestrated by two co-owners of an Albany, N.Y.-based firm who misused investor money to fund their struggling business operations and meet ever-increasing liquidity needs. The SEC has obtained a court order to freeze their assets.
According to the SEC’s complaint, filed in U.S. District Court for the Northern District of New York, Timothy M. McGinn and David L. Smith — through their firm McGinn, Smith & Co., Inc. (MS & Co.) and affiliated entities — raised approximately $120 million from investors in more than 25 debt offerings that were not registered with the SEC under the securities laws. They misrepresented that the investments would generate sufficient income to support the promoted interest rates and the return of principal at the end of the notes’ terms.
The SEC alleges that McGinn and Smith knew that it would never be possible to repay investors their principal, let alone the quarterly interest payments promised. McGinn and Smith instead misused offering proceeds 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. Although the full extent of the fraud is not yet known, it appears that investors are currently owed at least $80 million.
SEC Files Emergency Action to Halt Fraudulent Scheme at Albany-Based Firm [SEC]