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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1 (permalink)  
Old 01-14-2014, 10:34 AM
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Default Unequal Division of Property?

I've been struggling for some time to get proper disclosure in my divorce matter. It took me a long time but late last year, I was able to get a release from my ex which enabled my lawyer to deal directly with the U.S. investment company holding the largest portion of our marital assets and finally got all the documents released to me a few weeks ago. I've been in the process of reviewing them ever since. They were fascinating to say the least.

Two things:

1) My ex was an avid (and very unqualified) day-trader who managed to lose over 50% of the purchased value of the stock when the overall S&P went up over 25% over the course of the statements that I have (they only go back 10 years). This equates to a large sum of money in losses...somewhere in the vicinity of 200k.

2) There are a large number of check dispursements over the same 10 year period out of another account that he didn't have to declare capital gains on so I was unaware of...over 100k in the same 10 year period. I only really care about the last 2 years because he's supposed to disclosure any such large sums of money withdrawn on his financial statement but the overall amount was surprising because its not money that came back into our household...I'm not sure why he needed it or where it went.

Not that this is something that I'm personally interested in pursuing this litigation-wise but I'm very curious about the opinions of the knowledgeable posters. So my question is...

Do you think that stock market day-trading would/should qualify as "gambling" in a way that is considered reckless squandering of marital assets and may qualify one spouse for unequal division of property?
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Old 01-14-2014, 10:51 AM
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Quote:
Originally Posted by Pursuinghappiness View Post
I've been struggling for some time to get proper disclosure in my divorce matter. It took me a long time but late last year, I was able to get a release from my ex which enabled my lawyer to deal directly with the U.S. investment company holding the largest portion of our marital assets and finally got all the documents released to me a few weeks ago. I've been in the process of reviewing them ever since. They were fascinating to say the least.

Two things:

1) My ex was an avid (and very unqualified) day-trader who managed to lose over 50% of the purchased value of the stock when the overall S&P went up over 25% over the course of the statements that I have (they only go back 10 years). This equates to a large sum of money in losses...somewhere in the vicinity of 200k.

2) There are a large number of check dispursements over the same 10 year period out of another account that he didn't have to declare capital gains on so I was unaware of...over 100k in the same 10 year period. I only really care about the last 2 years because he's supposed to disclosure any such large sums of money withdrawn on his financial statement but the overall amount was surprising because its not money that came back into our household...I'm not sure why he needed it or where it went.

Not that this is something that I'm personally interested in pursuing this litigation-wise but I'm very curious about the opinions of the knowledgeable posters. So my question is...

Do you think that stock market day-trading would/should qualify as "gambling" in a way that is considered reckless squandering of marital assets and may qualify one spouse for unequal division of property?
You could certainly make that argument. I'm not sure how far you'd get and how much you'd spend.

Those are very large amounts of money but unless you have a paper trail I'd say your probably out of luck without a forensic accountant.
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Old 01-14-2014, 11:04 AM
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Quote:
You could certainly make that argument. I'm not sure how far you'd get and how much you'd spend.
As I stated, I'm not interested in any further litigation. I want to get my matter settled asap but leverage never hurts when you're negotiating an offer to settle. Hence, I was curious as to whether its even a valid argument and simply asking for opinions from the experienced posters.

Quote:
Those are very large amounts of money but unless you have a paper trail I'd say your probably out of luck without a forensic accountant.
I have all the records. My ex signed a legal release which allows me to request his account details directly from the investment company. I have 10 years of very detailed records and could ask for more in the event I needed them. At this point, disclosure is no longer an issue. I definitely don't need a forensic accountant to see what my ex was doing...I have every trade and withdrawal he made in the last 10 years of our marriage.
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Old 01-14-2014, 11:07 AM
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I think it would make some fascinating reading on CanLII.

Two things that would likely be worth considering:

1. Were you aware of the trading or the fund used for this activity?
2. The intent of the proceeds from the day trading.

Could be very interesting. IF you are only just now finding out about the fund then you could definitely claim your ex failed to provide full financial disclosure.
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Old 01-14-2014, 11:25 AM
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Originally Posted by Pursuinghappiness View Post
As I stated, I'm not interested in any further litigation. I want to get my matter settled asap but leverage never hurts when you're negotiating an offer to settle. Hence, I was curious as to whether its even a valid argument and simply asking for opinions from the experienced posters.



I have all the records. My ex signed a legal release which allows me to request his account details directly from the investment company. I have 10 years of very detailed records and could ask for more in the event I needed them. At this point, disclosure is no longer an issue. I definitely don't need a forensic accountant to see what my ex was doing...I have every trade and withdrawal he made in the last 10 years of our marriage.
Any leverage is good leverage.

I was more referring to the money that was withdrawn and you didn't know where it went.
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Old 01-14-2014, 11:43 AM
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Two things that would likely be worth considering:

1. Were you aware of the trading or the fund used for this activity?
2. The intent of the proceeds from the day trading.
1. I was aware of the IRA and obviously when you have an IRA that you occasionally move money around within it. I was not aware of the extent to which he was doing this. I was also not aware of the other account. It was just disclosed late last year. He rolled over the IRA from a large 401k and then split off the other account apparently so he could screw around with stocks? I had previously thought that this invested money into this account was part of what was rolled over.

2. There were no proceeds for the day trading...just losses....extensive ones. I'm sure he'd say that if he had made money it would have been used to enrich his children's lives...(lol, I could barely type that cause I was rolling my eyes so hard). That's the kind of stuff gamblers say.

The dispursements from the other investment account were not from stock proceeds but removed from the invested amount itself...they were simply check amounts that he requested directly to himself. I managed the joint account that we shared...and believe me, there are no records of large deposits to account for those checks. The money that went into the joint account came from our payroll deposits.

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I think it would make some fascinating reading on CanLII.
I'm not planning to litigate it but I thought it was interesting too and worth asking opinions on. For me, its not really a big deal...I knew my ex was a idiot with my money which is part of the reason I wanted him to get rid of him. Money is just money...its worth every penny to be able to move on with my life.

Quote:
I was more referring to the money that was withdrawn and you didn't know where it went.
Ah, I misunderstood FB. Well, I kept the only joint account we had for household expenses and I can tell you that it didn't go in there. I also managed our mortgage and it wasn't used for that either. I would assume he'd have to provide bank statements to prove otherwise which he wouldn't be able to do.

Last edited by Pursuinghappiness; 01-14-2014 at 11:46 AM.
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Old 01-14-2014, 11:52 AM
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Ah, I misunderstood FB. Well, I kept the only joint account we had for household expenses and I can tell you that it didn't go in there. I also managed our mortgage and it wasn't used for that either. I would assume he'd have to provide bank statements to prove otherwise which he wouldn't be able to do.
Well the money went somewhere and if you don't have a bank statement with this money on it he's still hiding more, which I'm sure you already know.

You might be able to get the account number it was sent to from the bank. Then you can request full disclosure on that account.
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Old 01-14-2014, 12:13 PM
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Well the money went somewhere and if you don't have a bank statement with this money on it he's still hiding more, which I'm sure you already know.
Yea, I do know...I just don't care at this point. I'm pretty sure and willing to bet my offer amount on the belief that its less than 100k so its not worth bothering with. I assumed he must have had a lot more until I realized that it was all stock losses.

I will bring up to my lawyer that if he starts being an ass during negotiations in the next couple weeks that she can start asking for the bank statements showing where the dispursed checks went but otherwise, I'm truly ready to get this done. I feel satisfied with what I do know..I didn't feel that way last year.

There will always be a chance that he managed to hide a larger sum of money, particularly considering how ridiculously hard he fought disclosure. He either has more of our money hidden or he's really didn't want me to know about the losses. Since he spent so much of our marriage bragging to me and a lot of other people about skilled he was navigating the market, I'm assuming its the latter. But regardless even if he's hiding money, based on his penchant for trading and his skill level doing it...if he has it, it won't be for long.

Frankly, I consider it charity on my part at this point. I'm doing a good deed...he needs any money that he has to attract a mate...lol. And if he's happier, he might start being less of a jagoff to our kid.

I'm still interested to know if any of the other experienced posters consider stock market day trading to qualify as "gambling" for the purposes of unequal division of assets though.
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Old 01-14-2014, 12:17 PM
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Yeah I gave my share to charity as well...
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Old 01-14-2014, 01:14 PM
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Here is one PH

CanLII - 2012 ONSC 5249 (CanLII)

Quote:
(c) Should Ensi be able to have an unequal division of net family property claiming reckless depletion of family property by Ali’s involvement in on-line stock trading?

[43] Counsel for Ensi argued for an unequal division of Net Family Property in her favour. The basis for the argument was section 5(6)(b) of the Family Law Act: “the fact that debts or other liabilities were incurred recklessly or in bad faith”; and section 5(6)(d): “a spouse's intentional or reckless depletion of his or her net family property”. She argued that it would be unconscionable to equalize the net family properties because of Ali's E-trading.

[44] It was noted that Ali began trading between $1 million and $2 million of stocks using credit card debt in early 2000 he stopped in 2011. Although the records are not complete, it can be shown by the chart given to me by counsel there appeared to be profits and losses from the stocks approximately as follows:
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