The New York State Court of Appeals has ruled that a woman can keep over $7.6 million in proceeds from her divorce settlement, even though they were ill-gotten gains of a Ponzi scheme perpetrated by her ex-husband. In February 2009, federal authorities arrested Stephen Walsh, a former executive at WG Trading, a commodities firm, for defrauding investors of more than $550 million. Janet Schaberg divorced Mr. Walsh in 2007 after 25 years of marriage. The federal government has not accused Ms. Schaberg of having any knowledge or participation in her former husband’s 13 year long Ponzi scheme. Nevertheless, the Securities Exchange Commission and the Commodity Futures Trading Commission attempted to seize Ms. Schaberg’s millions of dollars of stolen money in order to return it to the victims of the Ponzi scheme. The federal appeals court asked New York State’s highest court for guidance on the divorce issues. Judge Victoria A. Graffeo, writing for the New York Court of Appeals, ruled for Ms. Schaberg. Judge Graffeo based her ruling on upholding the finality of business transactions and maintaining the reasonable expectation that ex-spouses are free to move on with their lives after divorce settlements have been reached. Read the New York Times article here.