Tim Davidson Hemingway of Macon, Georgia, a stockbroker registered with Smith Brown Groover Inc., has been sanctioned by Financial Industry Regulatory Authority (FINRA) for his unsuitable recommendation of a high-risk investment strategy. On November 6, 2024, FINRA concluded its action through Letter of Acceptance, Waiver, and Consent (AWC) No. 2019063352402.
Without admitting or denying the findings, Hemingway consented to a four-month suspension and a fine of $7,500.00, which was paid on November 20, 2024. The suspension began on December 2, 2024, and ends on April 1, 2025.
FINRA found that Hemingway violated Rules 2111 and 2010 by failing to conduct adequate due diligence on a non-traditional exchange-traded note (ETN), which was unsuitable for his customers. The investment strategy was designed to generate returns during periods of declining market volatility and involved investments in a volatility-linked ETN that posed significant risks.
Hemingway lacked a reasonable basis to recommend the strategy due to insufficient understanding of the ETN’s features, risk-reward profile, and conditions under which it could lose all value. The 58 affected customers are being provided partial restitution through a settlement with Smith Brown Groover Inc.
According to FINRA Public Disclosure, Hemingway has also been involved in four customer initiated investment related arbitration claims and complaints. On October 23, 2019, a customer dispute was filed alleging a breach of fiduciary duty regarding a volatility-linked product. This matter was settled on June 24, 2022, for $554,406.00. FINRA Arbitration No. 19-03135.
Another arbitration claim was filed on February 11, 2019. Customers alleged that Smith Brown Groover Inc. used discretionary authority to invest in volatility-linked products that did not align with the customers’ stated investment objectives or risk tolerance. This claim was settled on September 10, 2019, for $132,500.00 under FINRA Arbitration No. 19-00400.
Two additional customer complaints were filed but ultimately closed without further action by the customer. One complaint, received on February 7, 2019, involved allegations that a volatile financial product was inappropriately recommended. The other, filed on August 22, 2018, alleged that customer IRA accounts were invested in high-risk products without proper authorization. Both complaints did not result in any financial compensation to the complainants.
Hemingway has been associated with Smith Brown Groover Inc. since August 25, 2005. He has also been registered with its subsidiary SBG Wealth Management since April 12, 2017.
