The White Law Group reviews the regulatory history of FSC Securities Corp.
FSC Securities Corp., (CRD#: 7461/SEC#: 801-42017,8-21770 ) headquartered in Atlanta, GA, is a full-service broker-dealer and registered investment advisor. FSC Securities, is a subsdiary of Advisor Group, and one of eight independent broker-dealers who will be rebranded as “Osaic” this year. The firm has been a FINRA member since 1977. FINRA is the regulator who oversees brokers and brokerage firms.
According to its FINRA Broker Report, the firm reportedly has 54 disclosure events on its broker record including 30 regulatory events, 16 arbitrations and 8 bonds. Regulatory actions taken against a broker-dealer may include censures, fines, suspensions and restitution, among others. They can have serious consequences for a broker-dealer’s profile and reputation. The following is a review of FINRA and the SEC’s regulatory actions involving FSC Securities Corp.
Broker Misconduct and Customer Complaints
There have been several cases of registered representatives affiliated with FSC Securities Corp. who were allegedly involved in broker misconduct and fraudulent activities.
August 2019 – 30 retired investors reportedly sued FSC Securities over allegations that registered advisors Craig Accardo & Frank Briseno III, in Metairie, Louisiana. The clients reportedly alleged that the two advisors “squandered their savings to earn big commissions.” Briseno and Accardo were reportedly cited in the suit as “nonparty representatives.” The suit alleged that the brokers misrepresented investments and sold the retirees high-risk securities to generate high commissions for the brokers, even though they purportedly knew their clients wanted low-risk investments that would protect their capital. FSC Securities Lawsuit – 30 Investors Allege Misrepresentation
August 2015 – A FINRA arbitration panel awarded $1.28 million to investors involved in a massive Ponzi scheme in 2015. FSC Securities Corp had to pay investors for Aubrey Lee Price’s alleged multi-million-dollar Ponzi scheme. According to the allegations, FSC failed to supervise the unnamed brokers in the arbitration claim that sold fraudulent securities. The two brokers allegedly worked with Price to solicit investment in the PFG Fund. FINRA Awards FSC Securities Investors $1.28 Million
FINRA Censures and Fines FSC Securities Corp.
December 2022 – FSC Securities was one of many firms sanctioned for unsuitable sales of GPB Capital offerings.
According to The Financial Industry Regulatory Authority (FINRA), between May 4, 2018, and June 29, 2018, FSC Securities, Royal Alliance, SagePoint Financial and Woodbury Financial negligently failed to communicate to investors that GPB Capital Holdings, LLC failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements. According to FINRA, each firm violated FINRA Rule 2010. In February 2022, the CEO of GPB Capital Holdings, a New York-based registered investment adviser, and two others were arrested in connection with a massive “Ponzi-like scheme” that allegedly defrauded 17,000 investors across the U.S. out of more than $1.7 billion, according to the U.S. Attorney’s Office for the Eastern District of New York.
While representatives at FSC Securities, and the other fimrs received the letter from GPB Capital notifying them of the delays and GPB Capital’s stated intention to complete a forensic audit, the four firms each sold limited partnership interests in GPB Automotive Portfolio after that announcement. FSC Securities agreed to a censure; a $50,000 fine; and partial restitution of $277,612.30 plus interest to harmed investors. Four more Firms Sanctioned for Unsuitable GPB Offerings
July 2018 – In one of several instances of supervisory failures, FSC Securities Corporation and three other firms agreed to FINRA’s sanctions in connection with variable annuities sales. According to the Letter of Acceptance, Waiver & Consent,the four firms allegedly failed to establish, maintain and enforce a supervisory system for the sale of multi-share class variable annuities and failed to provide training to their representatives and principals on the sale and supervision of multi-share class variable annuities. FSC was censured and fined $200,000 and was required to complete a new certification regarding supervision of multi-class variable annuities.FINRA Sanctions Four Firms for Failure to Supervise VA Sales
Supervisory Failures
July 2017 – FINRA censured and fined FSC Securities Corp $100,000 for supervisory failures after a registered representative sold memberships in an investment fund created by a former FSC representative. Without the firm’s knowledge or approval, the representative sold memberships in the unapproved fund, and the firm was unable to supervise the representative’s sales.
In connection with the fund sales, the representative submitted to the firm Letters of Authorization (LOA) signed by each of the 15 firm customers, which authorized in aggregate approximately $1.6 million to be transferred from their firm brokerage accounts to a bank account the fund controlled. The fund ultimately lost millions of dollars through speculative trading and other investments. To cover up the losses, the former firm representative created false account statements that fraudulently reflected fictitious assets and investment returns. FSC‘s customers who invested in the fund suffered significant losses. FSC Securities Corporation Censured and Fined
November 2017 – FINRA sanctioned FSC Securities Corporation on August 10, 2017, with a censure and fine of $100,000, and ordered the firm to pay $492,485.33 in restitution to customers. FSC Securities agreed to the sanctions for executing approximately 6,500 purchases of leveraged, or inverse, or both inverse and leveraged exchange-traded funds (non-traditional ETFs). Approximately 1,400 retail customer accounts were affected. FSC Securities Corporation Censured and Fined $100,000
Potential Lawsuits to Recover Investment Losses
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
If your broker has defrauded you, you may be able to file a FINRA claim against your brokerage firm. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can greatly increase your chances of success.
If you are concerned about investments you made with FSC Securities Corp. or if you believe that you have been the victim of securities fraud, The White Law Group may be able to help. To contact the firm, please call 888-637-5510
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others. With over 30 years of securities law experience, The White Law Group can help you recover your investment losses.
With offices in Seattle, Washington and Chicago, Illinois, the firm reviews securities fraud cases throughout the country. For more information on The White Law Group, please visit http://whitesecuritieslaw.com.
