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SEC charges investment adviser over allegedly improper sales charges

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SEC charges investment adviser over allegedly improper sales charges

The Securities and Exchange Commission charged McDermott Investment Advisors LLC and owner Dean Patrick McDermott with allegedly defrauding advisory clients by putting their money in investments that had higher charges.

The regulator alleged that the firm and McDermott invested clients' money in unit investment trusts that had "significant transactional sales charges" even if another version of the unit investment trust was available that did not have those costs. The company allegedly did not make the proper disclosures concerning the available trusts, which resulted in clients paying the unnecessary charges to McDermott Investment Services LLC, the company's affiliated broker/dealer.

The complaint also alleges that the owner and other McDermott Investment Advisors employees were also representatives of the broker/dealer that benefited from the sales charges.

The SEC is seeking joint and several disgorgement and prejudgment interest, civil monetary penalties, and other relief the court may decide to give.