Janney Montgomery Scott, Lewes adviser fined

A Greenville financial consultant and its senior vice president who worked as an investment adviser out of a Lewes office were fined by a Delaware investor unit and ordered to pay about $100,000 in settlements and restitution.

In a statement released Nov. 4, Attorney General Kathleen Jennings said her office’s Investor Protection Unit entered into two separate settlements with Janney Montgomery Scott LLC and Daniel Tidwell, a Janney investment adviser representative and senior vice president, who worked in the firm’s Lewes office.

Jennings said the unit began investigating Tidwell after receiving a complaint that he engaged in unsuitable trading in certain accounts, generating higher commissions for himself and Janney. Delaware law requires a financial professional to have a reasonable basis for believing an investment recommendation is suitable for the client after considering factors including their income, net worth and risk tolerance, she said.

The complaint alleged that Janney failed to supervise Tidwell over the advice he was providing investors and the accuracy of his professional registration records. The settlement of nearly $100,000 includes more than $30,000 in restitution for commissions. Jennings said Janney will pay $32,255 in restitution of certain commissions paid by some customers, and will also pay $40,000 in penalties. Tidwell will pay a penalty of $25,000 and face a 10-day suspension from work, followed by one year of heightened supervision.

“Protecting investors from unscrupulous financial professionals is at the core of investor protection,” she said in a statement. “These settlements send a message that neither investment professionals, nor the firms employing them, can prioritize fees over their clients.”

Proper registration of investment professionals is also important because it allows regulators to better monitor activity and ensure appropriate oversight of the industry and individuals, Jennings said.

For help checking the registration status of your financial professional, or to file a complaint, contact the Investor Protection Unit at Investor.Protection@delaware.gov. The Investor Protection Unit also encourages investors to check the registration status of financial professionals at brokercheck.finra.org and adviserinfo.sec.gov.