SEC Releases Statement on Jury Trial Decision Involving McDermott Investment Advisors

Posted on July 28th, 2022 at 3:09 PM
SEC Releases Statement on Jury Trial Decision Involving McDermott Investment Advisors

From the Desk of Jim Eccleston at Eccleston Law:

The Securities and Exchange Commission (SEC) has released a statement indicating that a Pennsylvania jury has ruled in its favor in a suit filed nearly three years ago against Dean McDermott and his firm over improper sales of unit investment trusts (UITs). 

The SEC initially charged McDermott Investment Advisors and its founder, Dean McDermott, in September 2019 with violating their fiduciary duties by investing several clients in UITs that featured a transaction fee while the clients were eligible for a cheaper version of the UITs. McDermott and the firm purchased nearly $5.7 million worth of higher-cost UITs for its clients, according to the SEC. The SEC additionally alleged that 90% of the $160,000 fees charged to clients were transferred to an unaffiliated broker-dealer, which was owned by McDermott. 

SEC Division of Enforcement Director Gurbir Grewal released a statement following the jury’s decision: "We are pleased with today’s jury verdict holding defendants liable for fraud against their investment advisory clients. This verdict underscores the bedrock principle that investment advisers must uphold their fiduciary duties to act in their client’s best interest, to seek the best execution of client transactions, and to fully and fairly disclose all material facts relating to conflicts of interest. When advisers fail to uphold these duties in order to line their own pockets, as the jury found today, they put their clients at risk. That’s why we will continue to pursue investment advisers who breach their fiduciary obligations." The SEC’s original complaint sought disgorgement as well as civil penalties. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, SEC, McDermott

Return to Archive

TESTIMONIALS

Previous
Next

I want to extend a tremendous thank you for your dedication, professionalism, hard work and patient demeanor through this challenging time. It was enjoyable interacting with everyone on your team, this certainly helped while dealing with the situation and working towards resolution.

Dan M.

LATEST NEWS AND ARTICLES

September 5, 2025
Merrill Lynch Advisor Faces FINRA Disciplinary Action for Refusing to Cooperate with Investigation

The Financial Industry Regulatory Authority (FINRA) has initiated disciplinary proceedings against former Merrill Lynch broker Ali F. Chehab of Portland, Oregon. According to ThinkAdvisor, FINRA alleges that he refused to cooperate in an investigation into potential misconduct, including unauthorized trading and material misrepresentati...

September 4, 2025
Wells Fargo Ties $2,000 Bonus to Non-Solicitation Clause, Raising Advisor Concerns

Wells Fargo & Co. recently issued a $2,000 bank-wide award to its 215,000 employees, following the Federal Reserve’s June decision to lift its asset growth restrictions.

September 3, 2025
Kansas City Advisory Firms Agree to $25.5 Million Settlement Over No-Poach Allegations

Mariner Wealth Advisors, along with two other Kansas City-area firms, has agreed to a $25.5 million class action settlement over allegations that they illegally agreed not to solicit each other’s advisors.