SEC Sues Sex Cruise Investment Firm

Funds used to pay for strippers, go-go dancers
By Rob Quinn,  Newser Staff
Posted Apr 21, 2010 4:52 AM CDT
SEC Sues Sex Cruise Investment Firm
The cruise company's website stressed that clothing is optional and sexual acts are permitted in designated 'playrooms.'   (Shutter Stock)

The bosses of an upstate New York investment firm used investors' cash to finance their own lavish lifestyles and to underwrite business ventures like a swingers' cruise line, according to an SEC lawsuit. The assets of McGinn, Smith & Co. have been frozen by court order while SEC investigators probe what they believe is a Ponzi scheme, the Albany Times-Union reports.

Investors were bilked out of a total of $136 million by the firm, the SEC alleges. The complaint states that investors were told some funds were invested in a cruise charter firm, but that the company failed to mention that the cruises were "sexually oriented, that strippers and go-go dancers would be procured to entertain passengers," and that company founder Timothy McGinn was romantically involved with the manager of the money-losing venture.
(Read more Timothy McGinn stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.