Mixed ruling for fraud victims

A federal judge this week granted a request by the U.S. Securities and Exchange Commission to use the seized assets of imprisoned former Albany brokers David L. Smith and Timothy M. McGinn to repay victims in what the government said was a years-long fraud scheme. But in his decision, U.S. District Chief Judge Gary L. Sharpe rejected the SEC’s request for $124 million, saying that the agency did not adequately document that amount as the total investors lost. Sharpe criticized the SEC for its “haphazard filing” in which he said it gave inconsistent estimates for the losses of hundreds of former investors at the brokerage. In the SEC’s legal brief, which the judge said contained typographical errors, the agency put investor losses at more than $80 million, but then said the losses were “approximately $100 million.” More in the Times Union here.

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