NASD Regulation Inc. on Friday announced the $200,000 fine against Tower Square Securities as well as the order to make $4.3 million in restitution to the Jefferson Parish Public School System’s Employees Deferred Compensation plan.
Also in the announcement, officials said complaints were filed against Kevin Dermody and his partner Randall Veselik for mishandling the school plan’s investment portfolio.
Specifically, officials charged that:
- Dermody directed plan officials to sell $10.8 in variable annuities and incur $670,000 in surrender charges. Dermody had been the plan’s investment manager since July 2000,
- Demody used that money along with other plan assets to buy securities and insurance products including investment contracts issued by a Dermody-Veselik company, Hilltopper Enterprises, L.L.C.
An independent audit of the plan as of June 30, 2001 revealed that liabilities to plan participants exceeded plan assets by more than $4.2 million.