Erez Law is currently investigating former FSC Securities Corporation financial advisor Tim Cannady (CRD# 5267061) regarding bank fraud and a fraudulent investment fund. Cannady was registered with Roosevelt Equity Corporation in Charlotte, North Carolina from May to November 2011. Previously, he was registered with FSC Securities Corporation in McDonough, Georgia from 2007 to 2010.
It is alleged that Cannady and other financial advisors at FSC Securities Corporation in McDonough, Georgia sold the unregistered and illegal PFG Investment Fund. This is known as selling away. Selling away occurs when a financial advisor sells an investment to a client without his brokerage firm’s permission, the broker is selling investments away from the firm, or simply “selling away.” A broker might partake in this inappropriate practice to earn a commission he or she would otherwise have to pass up. These investment opportunities are not properly vetted by the associated brokerage firm and therefore exposes the client to risk.
PFG filed for bankruptcy to liquidate under Chapter 7 of the U.S. bankruptcy code in July 2012. At the time of bankruptcy, it was estimated that PFG had between $500 million and $1 billion of assets, between $150 Million and $500 million of liabilities, and between 10,000 and 25,000 creditors, according to Reuters. In January 2013, the PFG CEO Russell R. Wasendorf, Sr. was sentenced to 50 years in federal prison for fraud, embezzlement, and lying to regulators, according to the Federal Bureau of Investigation (FBI). Wasendorf stole more than $215,000,000 in customer funds from his commodity futures business.
Cannady has also been the subject of one customer complaint, according to his CRD report:
May 2013. “Participation in sale of unapproved securities/misrepresentation.” The customer sought $1,768,298 in damages and the customer was awarded $845,000.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, FSC Securities Corporation may be liable for investment or other losses suffered by Cannady’s customers.
Erez Law represents investors in the United States for claims against former FSC Securities Corporation financial advisor Tim Cannady regarding bank fraud and a fraudulent investment fund. If you were a client of former FSC Securities Corporation or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.