Statement on Decision in Jury Trial of Dean McDermott and McDermott Investment Advisors
Gurbir S. Grewal, Director, Division of Enforcement
July 12, 2022
After a six-day trial, a jury serving in the United States District Court for the Eastern District of Pennsylvania ruled in favor of the SEC against Dean McDermott and his investment advisory firm, McDermott Investment Advisors, LLC, for breaching fiduciary duties owed to their advisory clients in connection with the selection of unit investment trusts (UIT). In violation of their fiduciary duties, the defendants selected a version of UIT that carried significant transactional sales charges when another version of the same UIT was equally available without those costs.
Statement of SEC Division of Enforcement Director Gurbir S. Grewal:
"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."
On September 13, 2019, the SEC filed its civil complaint: