Sean M. McDermott Allegedly Fails to Supervise Representative Causing Investment Fraud

Cleveland stockbroker fraud lawyerSean M. McDermott, an investment professional in Radnor, PA, was charged with allegedly not adequately supervising another registered representative, Kevin Hamilton which allowed Hamilton to defraud investors of approximately $522,000, as per the FINRA report.

The Peiffer Rosca law firm’s securities practice attorneys Alan Rosca and Joe Peiffer are investigating the matter on behalf of investors.

Sean McDermott Is a Financial Industry Veteran

McDermott first became registered with FINRA as a General Securities Representative on January 1, 2001, as stated in the FINRA report. Since then, McDermott has been associated with FINRA registered firm, Philadelphia Brokerage Corporation, as the owner and its Chief Compliance Officer. McDermott does not have any previous disciplinary history with investment fraud allegations.

Kevin Hamilton Allegedly Defrauds Investors While Under Sean McDermott’s Supervision

From December of 2010 to around July of 2013, Kevin Hamilton, who was at the time registered with Philadelphia Brokerage Corporation as both a General Securities Representative and Principal, coveted and/or misused around $522,000 from three investors, as specified in the FINRA report. He did this by using the 1041, a limited partnership that he controlled and marketed as an “investment fund.” Hamilton also falsely misrepresented and/or omitted material facts in regarding his solicitation of 1041 investments.

Sean McDermott Missed Several “Red Flags” Concerning Hamilton’s Behavior

McDermott, who was in charge of supervising Hamilton during this time, allegedly failed at his task, according to the FINRA report. He was unsuccessful in reasonably responding to several “red flags” concerning Hamilton’s 1041 securities activity, such as suspicious wires transmitted from accounts at Philadelphia Brokerage Corporation.

During the Relevant Period, McDermott was informed that Hamilton was soliciting investment in 1041 from Philadelphia Brokerage Corporation’s customers, according to the FINRA report. Despite his knowledge, he did not make any realistic efforts to find out the extent of Hamilton’s securities activities. McDermott also had knowledge that Hamilton had deposited large amounts of funds belonging to 1041 investors into the 1041’s brokerage account at Philadelphia Brokerage Corporation and an outside personal bank account, and approved several of these wire transactions. McDermott also knew about Hamilton’s email account used for his 1041-related activities which was kept separate from Philadelphia Brokerage Corporation’s account and had some of these emails forwarded to him but he failed to review them. Despite all of these warning signs, McDermott failed to investigate Hamilton’s 1041-related activities, thereby breaking FINRA rules as specified in the FINRA report.

Investor Right Attorneys Investigating McDermott’s Misconduct

The Peiffer Rosca attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting investors with the recovery of any losses they may have suffered in connection with Sean M. McDermott. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Broker: Sean M. McDermott

Status: INVESTIGATED by Peiffer Rosca.

For brokercheck report and additional info click here!

Broker: Kevin Hamilton

Status: INVESTIGATED by Peiffer Rosca.

For brokercheck report and additional info click here!

Alan Rosca (1225 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.