FINRA Suspends Tim Hemingway for Alleged Unsuitable Trading Strategy

Tim Hemingway (CRD #: 5013252), a broker registered with Smith, Brown & Groover, has been suspended by FINRA, according to his BrokerCheck record, accessed on December 12, 2024. Investors may have also worked with him through SBG Wealth Management. If you have questions about his alleged conduct as a broker, keep reading.

FINRA Suspension

On November 6, 2024, Tim Hemingway consented to the entry of findings that he allegedly recommended a trading strategy to 58 clients between July 2014 and February 2018 without fully understanding the features and risks associated with it or the exchange-traded note (ETN) that the strategy invested in.

According to a Letter of Acceptance, Waiver & Consent (AWC), another broker allegedly developed the trading strategy Tim Hemingway recommended, which primarily involved investing in an inverse and volatility-linked ETN. This is a complex type of investment designed to generate returns when the volatility of an index declines.

Notably, the ETN’s prospectus and pricing supplement allegedly disclosed that it may not be suitable for investors who planned to hold it for more than a day and that a spike in volatility could cause investors to lose all of their investment.

The AWC alleged that Tim Hemingway failed to conduct his own due diligence on this trading strategy or the ETN and their potential risks or rewards, resulting in him failing to have a reasonable basis for recommending the trading strategy to any investor.

The AWC concluded that these allegations constituted violations of FINRA Rules 2111 and 2010.

FINRA Rule 2111

FINRA Rule 2111 requires brokers to recommend securities that sufficiently suit an investor’s financial goals. Brokers must consult the investor’s profile, which contains information about their tax status, risk tolerance, and age.

Investors who rely on brokers for recommendations may be able to recover their losses by pursuing FINRA arbitration.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

Sanctions

Tim Hemingway consented to the following sanctions:

• 4-month suspension from associating with FINRA members
• $7,500 fine

His suspension began on December 2, 2024, and will end on April 1, 2025. You can access the full AWC here.

Investor Disputes

On October 23, 2019, an investor named Tim Hemingway in allegations concerning a volatility-linked product. This dispute was settled for $554,406.

In a dispute filed on February 11, 2019, multiple investors named Tim Hemingway in allegations that Smith, Brown & Groover used discretion to invest clients in volatility-linked products that were unsuitable for their stated investment objectives, risk tolerance, and status as non-institutional or sophisticated investors. This dispute was settled for $132,500.

Background Information

Tim Hemingway has passed the following exams:

• Securities Industry Essentials Examination – SIE
• General Securities Representative Examination – Series 7
• Uniform Investment Adviser Law Examination – Series 65
• Uniform Securities Agent State Law Examination – Series 63

Tim Hemingway is a registered broker in 11 states and a registered investment adviser in Georgia.

Kurta Law Can Help

If you worked with Tim Hemingway and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.