Delaware News

AG Jennings secures lengthy suspension from Wilmington financial adviser for false statements to securities regulator

Department of Justice | Department of Justice Press Releases | News | Date Posted: Tuesday, February 14, 2023


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Attorney General Kathy Jennings last week secured a multi-year suspension and fines from a Wilmington based financial adviser for making false and misleading statements to her office’s Investor Protection Unit, the state securities regulator for Delaware, and for providing advisory services to clients while unregistered to do so.

“Protecting investors from unscrupulous financial professionals is at the core of investor protection,” said AG Jennings.  “Investors put a lot of trust into their investment professionals and it is important that the trust is deserved. This means that investment professionals may not mislead the very regulators tasked with monitoring them.”

Robert Brandon Prettyman and the Investor Protection Unit (the “Unit”), the arm of the Delaware Department of Justice that regulates the registration and conduct of securities firms and professionals in the state, reached an agreement settling a pending administrative matter and a separate active investigation.

According to the agreement, Prettyman, president of Summit Wealth Advisors, will pay $60,000 in costs and penalties, and serve a two-and-a-half year suspension from registration in Delaware.

The Unit initiated the administrative matter against Prettyman in December 2021, alleging that, among other things, he had misrepresented in a sworn statement to the Unit the reason a former employer had terminated him.  In June 2022, on a motion for summary disposition on the pleadings, the Presiding Officer overseeing the matter found that Prettyman had made materially false and misleading statements to the Unit.

Around the same time, the Unit received additional information that led it to open a new investigation into (i) whether Prettyman continued to provide advisory services while unregistered; (ii) whether Prettyman’s recommendations to former advisory clients regarding annuities were suitable under the circumstances; (iii) whether Prettyman’s attempt to move client assets en masse was a breach of his fiduciary duties to those clients; and (iv) whether Prettyman acquired a Florida driver’s license in an attempt to avoid having to register in Delaware.

This settlement resolves both the administrative matter and the new investigation.

In addition to securing the more than two-year suspension and fines, the efforts of the Investor Protection Unit allowed three Delaware investors to unwind their purchases of annuities. This allowed the investors to avoid collectively spending over $100,000 in commissions, along with tens of thousands of dollars in surrender charges, associated with those unwanted transactions.

Proper registration of investment professionals is important as it allows regulators to better monitor activity and ensure appropriate oversight of the industry and individuals. For help checking the registration status of your financial professional, or to file a complaint, please 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.

This matter was handled by Deputy Attorney General Victor Clark and Special Investigator Rob Joseph, both of the Investor Protection Unit in the Fraud and Consumer Protection Division of the Delaware Department of Justice.

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AG Jennings secures lengthy suspension from Wilmington financial adviser for false statements to securities regulator

Department of Justice | Department of Justice Press Releases | News | Date Posted: Tuesday, February 14, 2023


Navy blue background featuring the Delaware state seal in the center

Attorney General Kathy Jennings last week secured a multi-year suspension and fines from a Wilmington based financial adviser for making false and misleading statements to her office’s Investor Protection Unit, the state securities regulator for Delaware, and for providing advisory services to clients while unregistered to do so.

“Protecting investors from unscrupulous financial professionals is at the core of investor protection,” said AG Jennings.  “Investors put a lot of trust into their investment professionals and it is important that the trust is deserved. This means that investment professionals may not mislead the very regulators tasked with monitoring them.”

Robert Brandon Prettyman and the Investor Protection Unit (the “Unit”), the arm of the Delaware Department of Justice that regulates the registration and conduct of securities firms and professionals in the state, reached an agreement settling a pending administrative matter and a separate active investigation.

According to the agreement, Prettyman, president of Summit Wealth Advisors, will pay $60,000 in costs and penalties, and serve a two-and-a-half year suspension from registration in Delaware.

The Unit initiated the administrative matter against Prettyman in December 2021, alleging that, among other things, he had misrepresented in a sworn statement to the Unit the reason a former employer had terminated him.  In June 2022, on a motion for summary disposition on the pleadings, the Presiding Officer overseeing the matter found that Prettyman had made materially false and misleading statements to the Unit.

Around the same time, the Unit received additional information that led it to open a new investigation into (i) whether Prettyman continued to provide advisory services while unregistered; (ii) whether Prettyman’s recommendations to former advisory clients regarding annuities were suitable under the circumstances; (iii) whether Prettyman’s attempt to move client assets en masse was a breach of his fiduciary duties to those clients; and (iv) whether Prettyman acquired a Florida driver’s license in an attempt to avoid having to register in Delaware.

This settlement resolves both the administrative matter and the new investigation.

In addition to securing the more than two-year suspension and fines, the efforts of the Investor Protection Unit allowed three Delaware investors to unwind their purchases of annuities. This allowed the investors to avoid collectively spending over $100,000 in commissions, along with tens of thousands of dollars in surrender charges, associated with those unwanted transactions.

Proper registration of investment professionals is important as it allows regulators to better monitor activity and ensure appropriate oversight of the industry and individuals. For help checking the registration status of your financial professional, or to file a complaint, please 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.

This matter was handled by Deputy Attorney General Victor Clark and Special Investigator Rob Joseph, both of the Investor Protection Unit in the Fraud and Consumer Protection Division of the Delaware Department of Justice.

image_printPrint


Graphic that represents delaware news on a mobile phone

Keep up to date by receiving a daily digest email, around noon, of current news release posts from state agencies on news.delaware.gov.

Here you can subscribe to future news updates.