In April 2010, both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) filed lawsuits against McGinn Smith and its principals alleging that from 2003 through April 2010, McGinn Smith committed an ongoing fraud involving over 900 investors. The suits allege that McGinn Smith lured its customers into several different classes of so called Income Note investments with the understanding that McGinn Smith profited from the difference between the cost of the investment and its rate of return. However, instead of using customer money consistent with the Income Notes' offering documents' terms, McGinn Smith fraudulently transferred investor funds into entities it owned or controlled, which were not disclosed to investors.
McGinn Smith used National Financial Services, LLC, a Fidelity company, as its clearing firm since 2005. Most McGinn Smith clients were required to maintain an account with NFS to invest in the McGinn Smith investments. NFS provided significant clearing and back office operations for McGinn Smith.
The law firm of David R. Chase, P.A. is representing many customers with losses in these investments in claims against NFS for negligence and other claims and are attempting to recover their investment losses in FINRA arbitration.
If you lost money in investments through McGinn Smith and maintained an NFS account, call me for a free consultation. David R. Chase, Esq., a former SEC Enforcement Attorney, can be reached toll free at: 866-457-2847 or david@davidchaselaw.com.
