Securities and Exchange Commission v. McGinn, Smith & Co, Inc. et al

Plaintiff: Securities and Exchange Commission
Defendant: McGinn, Smith & Co, Inc., McGinn, Smith Advisors, LLC, McGinn, Smith Capital Holdings Corp., First Advisory Income Notes, LLC, First Excelsior Income Notes, LLC, First Independent Income Notes, LLC, Third Albany Income Notes, LLC, Timothy M. McGinn, David L. Smith and Lynn A. Smith
Case Number: 1:2010cv00457
Filed: April 20, 2010
Court: New York Northern District Court
Office: Albany Office
County: Albany
Presiding Judge: Gary L. Sharpe
Referring Judge: Randolph F. Treece
Nature of Suit: Securities/Commodities/Exchanges
Cause of Action: 28:1345
Jury Demanded By: Plaintiff

Available Case Documents

The following documents for this case are available for you to view or download:

Date Filed#Document Text
May 9, 2011 321 Opinion or Order of the Court MEMORANDUM-DECISION and ORDER, that Lynn Smith's 224 Motion to Dismiss is DENIED. That the Trust, Geoffrey Smith, and Lauren Smith's 283 Motion to Dismiss is GRANTED in part as to the fraudulent conveyance claims against Lauren Smith a nd Geoffrey Smith in his individual capacity. That the Trust, Geoffrey Smith, and Lauren Smith's 283 Motion to Dismiss is DENIED in part as to the fraudulent conveyance claim against the Trust. That the SEC is GRANTED limited leave to re-ame nd its complaint, in full compliance with the terms of this Order, within thirty (30) days from the date of the filing of this Order, after which Geoffrey Smith and Lauren Smith shall respond to the complaint as permitted under the Federal Rules of C ivil Procedure. That if the SEC fails to file an amended complaint within thirty (30) days from the date of the filing of this Order, the Clerk of the Court shall enter judgment dismissing Geoffrey Smith and Lauren Smith from this action without further order of the court. Signed by Judge Gary L. Sharpe on 5/6/2011. (jel, )
April 4, 2012 478 Opinion or Order of the Court MEMORANDUM-DECISION and ORDER. IT IS HEREBY ORDERED that Timothy McGinn's motion for the release of assets from the preliminary injunction to pay attorney's fees and costs in the parallel criminal action 439 is GRANTED in part and DENIED in part as set forth in this Order; 2) David Smith's motion for the release of assets from the preliminary injunction to pay attorney's fees and costs in the parallel criminal action 440 is GRANTED in part and DENIED in part as set forth in this Order; and 3) The Trust's motion for the release of assets from the preliminary injunction to pay past and future expenses, to reimburse David Smith and his wife for Trust expenses they paid, and for payment of attorney's fees and costs in this action 441 is DENIED in all respects. Signed by Magistrate Judge David R. Homer on 4/4/2012. (mab)
April 4, 2012 479 Opinion or Order of the Court ORDER regarding 453 the motion of William J. Brown, as Receiver, for an Order Approving the Sale and Bidding Procedures with Respect to the Sale of Certain Alarm System Monitoring Accounts. IT IS HEREBY ORDERED that the Motion is APPROVED. IT IS FU RTHER ORDERED that the Receiver's interests in the Accounts and assets on the Rider to the APA shall be sold and assigned to the Purchaser without recourse, representation or warranty and free and clear of all liens, claims, encumbrances and oth er interests, with such liens and claims, if any, attaching to the net proceeds of sale. IT IS FURTHER ORDERED that the Receiver is authorized to pay the break-up fee of $60,000.00 to the stalking horse bidder, Alarm Services, LLC. Signed by Magistrate Judge David R. Homer on 4/4/2012. (mab)
October 15, 2012 539 Opinion or Order of the Court MEMORANDUM-DECISION and ORDER granting 538 Sealed Application. Signed by Magistrate Judge Christian F. Hummel on 10/15/2012. (dpk)
January 8, 2013 557 Opinion or Order of the Court MEMORANDUM-DECISION AND ORDER re 556 Sealed Document filed by David L. Smith. It is hereby ORDERED, that Dreyer Boyajian LLP's Fourth Application for compensation for legal services rendered between 12/1/2012 and 12/31/2012 in the amount of & #036;66,717.50 is approved. ORDERED that the application by Dreyer Boyajian LLP for reimbursement of costs expended between 12/1/2012 and 12/31/2012 in the amount of $900.89 is approved. ORDERED that Dreyer Boyajin LLP may make further applications as deemed appropriate. ORDERED that Dreyer Boyajian LLP is authorized to make the payments allowed pursuant to this Order. Signed by Magistrate Judge Christian F. Hummel on 1/8/2013. (dpk)
February 19, 2013 562 Opinion or Order of the Court MEMORANDUM-DECISION AND ORDER re 561 Amended Fifth Application for Attorney's Fees and Costs filed by David L. Smith. ORDERED that Dreyer Boyajian LLP's Fifth Amended Application for compensation for legal services rendered between 1/1/2 013 and 1/31/2013 in the amount of $92,137.50 is approved. ORDERED that the application by Dreyer Boyajian LLP for reimbursement of costs expended between 1/1/2013 and 1/31/2013 in the amount of $3,502.09 is approved. ORDERED that Dreyer Boyajian LLP may make further applications as deemed appropriate. ORDERED that Dreyer Boyajian LLP is authorized to make the payments allowed pursuant to this Order. Signed by Magistrate Judge Christian F. Hummel on 2/19/2013. (dpk)
November 22, 2013 647 Opinion or Order of the Court MEMORANDUM DECISION and ORDER re 604 Status Report filed by William J Brown. It is ORDERED that the Receiver may proceed with the sale of the Sacandaga Lake Property pursuant to the report filed with the court (Dkt. No. 604). Signed by Magistrate Judge Christian F. Hummel on 11/22/2013. (lah)
February 21, 2014 684 Opinion or Order of the Court MEMORANDUM-DECISION AND ORDER denying 660 Motion to Amend Documentation. It is hereby ORDERED that the Trust's motion to amend its documentation to delete the provisions authorizing the Trust to enter into the private annuity agreement with David and Lynn Smith is DENIED. Signed by Magistrate Judge Christian F. Hummel on 2/21/2014. (dpk)
December 12, 2014 806 Opinion or Order of the Court ORDER - ORDERED that Timothy McGinn and Nancy McGinn either notify the court and opposing counsel of their intention not to respond to the SEC's motion or file their response(s) within FOURTEEN (14) DAYS of this Orders filing date; and it is further ORDERED that if Timothy McGinn and/or Nancy McGinn file(s) a response, the SEC may file a reply within SEVEN (7) DAYS from the filing of the response(s). Signed by Chief Judge Gary L. Sharpe on 12/12/2014. (jel, )
February 17, 2015 807 Opinion or Order of the Court MEMORANDUM-DECISION and ORDER - ORDERED that the SEC's motion for summary judgment is GRANTED IN PART and DENIED IN PART as follows: GRANTED with respect to the SEC's first cause of action alleging violations of § 17(a) of the S ecurities Act, as against MS & Co., MS Advisors, MS Capital, McGinn, and Smith; GRANTED with respect to the SEC's second cause of action alleging violations of § 10(b) of the Exchange Act, and Rule 10b-5 thereunder, as against MS & C o., MS Advisors, MS Capital, McGinn, and Smith; GRANTED with respect to the SEC's third cause of action alleging violations of § 15(c)(1) of the Exchange Act as against MS & Co., and aiding and abetting violations of § 15(c) (1) as against McGinn and Smith; GRANTED with respect to the SEC's fourth cause of action alleging violations of the Advisors Act as against MS & Co., MS Advisors, McGinn, and Smith; GRANTED with respect to the SEC's si xth cause of action alleging violations of §§ 5(a) and 5(c) of the Securities Act as against MS & Co., MS Capital, McGinn, and Smith; GRANTED with respect to the SEC's request for a permanent injunction barring McGinn and Sm ith from committing future violations of §§ 5(a), 5(c), and 17(a) of the Securities Act, § 10(b) of the Exchange Act, and Rule 10b-5 thereunder, § 15(c)(1) of the Exchange Act, and Rule 10b-3 thereunder, and § 7; 206(1), 206(2), and 206(4) of the Investment Advisers Act, and Rule 206(4)-8 thereunder; and GRANTED with respect to the SEC's request for an order barring McGinn from serving as an officer or director of a public company; and DENIED w ith respect to the SEC's request for civil penalties; and it is further; ORDERED that the court reserves judgment on the SEC's request for disgorgement of profits, only as to the appropriate amount. If the SEC wishes to pursue this theor y, consistent with this Memorandum-Decision and Order, the SEC must provide a reasonable approximation of the profits causally connected to the violations within SEVEN (7) DAYS from the issuance of this Memorandum-Decision and Order. Smith may respo nd within SEVEN (7) DAYS after the SEC files its submission; and it is further; ORDERED that the court reserves judgment on the remainder of the SEC's motion; and it is further ORDERED that, within SEVEN (7) DAYS of this Memorandum-Dec ision and Order, the SEC inform the court whether it has abandoned and/or withdrawn its fifth cause of action and sixth cause of action insofar as it is alleged against the Four Funds, or whether it seeks a trial on those claims; and it is further ORDERED that McGinn and Smith are enjoined from committing future violations of §§ 5(a), 5(c), and 17(a) of the Securities Act, § 10(b) of the Exchange Act, and Rule 10b-5 thereunder, § 15(c)(1) of the Exchange Act, a nd Rule 10b-3 thereunder, and §§ 206(1), 206(2), and 206(4) of the Investment Advisers Act, and Rule 206(4)-8 thereunder; and it is further ORDERED that McGinn is permanently and unconditionally barred from acting as an officer or director of any issuer that has a class of securities registered pursuant to 15 U.S.C. § 78l or that is required to file reports pursuant to 15 U.S.C. § 78o(d). Signed by Chief Judge Gary L. Sharpe on 2/17/2015. (jel, )
March 30, 2015 816 Opinion or Order of the Court MEMORANDUM-DECISION and ORDER - That the remainder of the SEC's motion for summary judgment (Dkt. No. 708, Attach. 1 at 14-29, 32-40) is GRANTED. That the SEC's requests for disgorgement of profits in the amount of $87,433,218 and prej udgment interest in the amount of $11,668,132 are GRANTED. That $99,101,350 - the total amount of disgorged profits plus prejudgment interest - be returned to defrauded investors. That the following assets may be applied in order to satis fy the disgorgement order: (1) the Stock Account; (2) the Smith Vero Beach Home; (3) the Checking Account; and (4) the Smith Trust. That the Clerk defer entering judgment as against the Four Funds, MS & Co., MS Advisors, and MS Capital pending furth er direct from the court. That Brown, on behalf of the Four Funds, may consent to entry of judgment on the SEC's fifth and sixth causes of action, and is directed to file his consent with the court within fourteen (14) days of this Memorandum-De csiion and Order. That Brown is further directed to inform the court, in writing, once the funds have been distributed to investors and he is ready to close the receivership, so that the court may enter judgment. That L. Smith's motion for summary judgment (Dkt. No. 696) is DENIED as moot. That the Smith Trust, L.T. Smith, and G. Smith's motion for summary judgment (Dkt. No. 704) is DENIED. Signed by Chief Judge Gary L. Sharpe on 3/30/2015. (jel, )

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Plaintiff: Securities and Exchange Commission
Represented By: David P. Stoelting
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Defendant: McGinn, Smith & Co, Inc.
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Defendant: McGinn, Smith Advisors, LLC
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Defendant: McGinn, Smith Capital Holdings Corp.
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Defendant: First Advisory Income Notes, LLC
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Defendant: First Excelsior Income Notes, LLC
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Defendant: First Independent Income Notes, LLC
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Defendant: Third Albany Income Notes, LLC
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Defendant: Timothy M. McGinn
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Defendant: David L. Smith
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Defendant: Lynn A. Smith
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