Michael Carroll, Executive Editor, Albany Government Law Review Member
“McGinn, Smith invested nearly all of [Mr.] Steinkirchner’s life savings into a high-risk investment fund . . . ‘It virtually destroyed his retirement plan’ . . . ‘He had to go back to work.”
McGinn, Smith, a once prominent investment firm in Albany, New York, has been accused by the Securities and Exchange Commission (“SEC”) of “running a $136 million [Ponzi] scheme that funneled cash from hundreds of investors into a sex-themed cruise line operation and other highly speculative businesses while funding a lavish lifestyle for [the] company[‘s] founders.” According to the SEC, the alleged Ponzi scheme primarily concerned McGinn, Smith’s sale of private placement securities to over 900 different investors. The SEC’s complaint alleges that the private placements carried “a high-degree of risk” due to the fact that these securities were unregulated and illiquid. McGinn, Smith allegedly sold these products to investors by promising high rates of return (in some cases 13%) while reassuring the clients that the investments were safe. The SEC’s complaint states that at least one investor claimed that he was “steered . . . away from investing in blue chip stocks like General Electric as too risky, and [was] told . . . that the Fund private placements were safer investments.”
Continue reading “Protecting Investors from Unpaid Securities Arbitration Awards”
Michael Telfer, Editing Chair, Albany Government Law Review Member
On July 1, 2010, the New York Assembly passed a bill making no-fault divorce legal in New York, following in the footsteps of the State Senate. As a result of Governor Patterson’s expected signing of the bill, New York will become the last state in the country to adopt some form of no-fault divorce. This new law will allow couples residing in the state “to dissolve their marriage by mutual consent and without requiring one spouse to accuse the other of adultery, cruelty, imprisonment, or abandonment.” Upon the law going into effect, one spouse will also be able “to divorce the other unilaterally.”
The Evolution of New York Divorce Law
Divorce law in New York has evolved greatly from its first adoption in 1787, when the legislature relinquished its exclusive power to grant divorces and enacted a law “permit[ing] judicial divorce on the sole ground of adultery.” Both the legislature and the courts shared the power to grant divorces until 1846, when “[l]egislative divorce was constitutionally abolished.” In 1877 divorce law evolved further when the legislature authorized courts to “deny divorce, even where adultery had been proven, if the plaintiff had connived in the procurement of the evidence, condoned the offense, or was” also guilty of adultery. These three defenses to adultery remain in place today.
In order to avoid the strictness of New York divorce law, by the late 19th century some New Yorkers began to travel to other states which had less stringent divorce laws, where they established residency in order to “procure a divorce.” This practice was aided by the inaction of the Legislature, as “[b]etween . . . 1900 and 1933, fifteen different legislators sponsored bills to modernize the law” of which a majority failed to pass out of committee.
Continue reading “No Fault Divorce: A Look at the Past and Future of New York Divorce Law”