Brokerage Firm Alert: Our Investment Fraud Attorneys Are Investigating FSC Securities Corporation and Osaic Wealth
Did You Lose Money Because of FSC Securities and Osaic Wealth? Are You Aware of Complaints and Fines Against FSC Securities and Osaic Wealth?
Updated on: December 21, 2023
FSC Securities Corporation, now called Osaic Wealth (“FSC Securities”) (CRD # 7461) is a broker-dealer and has been the subject of at least thirty-one (31) complaints filed by regulatory organizations like FINRA and many more by investors like yourself. At Patil Law, we have investigated FSC Securities, its regulatory complaints and fines, and its customer complaints. If you’ve invested your hard-earned money with FSC Securities, you should be very concerned about any regulatory actions, regulatory fines, or customer complaints against your brokerage firm.
Our team of attorneys specialize in representing investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors. As an investor, you may be entitled to compensation for losses accrued due to mismanagement of your investments.
If you believe you have a claim against FSC Securities, you should strongly consider hiring an investment fraud lawyer and not wait until it’s too late to file a claim. Reach out to our legal team via the secure and private online form or call our firm directly toll-free at 1-800-950-6553 for a free consultation so that we can discuss your case and see what we can do to help you get the compensation you need and deserve. We do not charge anything for the ability to discuss your matter and evaluate your potential case.
Jump to Topic
Do I Have an Investment Fraud Case Against FSC Securities (now called Osaic Wealth)?
Who is FSC Securities (now called Osaic Wealth)?
How To File a Claim Against FSC Securities (now called Osaic Wealth) To Get Your Money Back
Client Complaints – Is Your Financial Advisor on This List?
Did Misconduct By a FSC Securities Corporation Advisor Impact Your Investments? What Can You Do?
FSC Securities (now called Osaic Wealth) Has Many Regulatory Complaints and Fines
A Closer Look Into FSC Securities’ Regulatory Issues
Next Steps and Free Consultation with Our Legal Team
Do I Have an Investment Fraud Case Against FSC Securities Corporation (now called Osaic Wealth)?
✅ YES, if you’ve experienced financial losses due to the actions or misconduct of FSC Securities or its staff, you have the right to pursue legal action against them. You can sue FSC Securities but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.
FINRA arbitration proceedings are generally private proceedings that can last anywhere from a few months to approximately a year. Our attorneys have personal experience in representing clients in FINRA arbitration proceedings and know very well how you can not only sue FSC Securities in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a case against FSC Securities is to reach out to our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a complimentary consultation.
Who is FSC Securities Corporation?
FSC Securities Corporation, now called Osaic Wealth (CRD # 7461) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors. As a registered broker-dealer, FSC Securities is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests. A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
How To File A Claim Against FSC Securities Corporation (now called Osaic Wealth) To Get Your Money Back
If you have questions about FSC Securities, its advisors, or the management or performance of your accounts, please contact our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a free and complimentary initial consultation. Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date.
We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money. We can help you, as we have helped hundreds of other clients in the past.
Client Complaints – Is Your Financial Advisor on This List?
There have been scores of customer complaints filed against FSC Securities (now called Osaic Wealth) stockbrokers and investment advisors over the years. Many of these complaints deal with financial advisor misconduct, poor or unsuitable investment recommendations, failure by these brokerage firms to supervise their employees (the financial advisors), and general fraud against consumers. We have launched many investigations of current and former FSC Securities advisors:
- Scott Ferguson with Cambridge Investment Research (previously with FSC Securities Corporation (Osaic) and Cambridge Investment Research Advisors)
- Michael Medford currently unaffiliated (previously with FSC Securities Corporation (Osaic) and Cambridge Investment Research)
- Timothy Owens with Cambridge Investment Research (previously with FSC Securities Corporation (Osaic) and Cambridge Investment Research Advisors)
- Ronald Williams with Cambridge Investment Research (previously with FSC Securities Corporation (Osaic) and Investacorp)
- Greg Koalska currently unaffiliated (previously with FSC Securities Corporation (Osaic) and KCD Financial)
- Steven Case with LPL Financial (previously with FSC Securities Corporation (Osaic) and National Planning Corporation)
- Cheryl Brown with LPL Financial (previously with FSC Securities Corporation (Osaic) and H. Beck)
- Mark Zitzelsberger with LPL Financial (previously with FSC Securities Corporation (Osaic) and Total Investment Planners)
- Cesar Macedo with LPL Financial (previously with FSC Securities Corporation (Osaic))
Did Misconduct By an FSC Securities Advisor Impact Your Investments?
If you have lost money investing with any of these FSC Securities advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call our legal team at Patil Law toll-free at 1-800-950-6553 or reach out to us via the secure and private online form for a free initial consultation.
FSC Securities Corporation (now called Osaic Wealth) Has Many Regulatory Complaints and Fines
There have been approximately thirty-one (31) state and self-regulatory body disclosure events against FSC Securities; that is, final and formal proceedings initiated by a regulatory authority like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) for a violation(s) of investment-related rules or regulations. In addition, there have been countless customer complaints filed against FSC Securities for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
Our legal team at Patil Law has reported and written about these regulatory problems and customer complaints over many years. A few of the notable FINRA Sanctions for its Supervisory Failures are below.
A Closer Look Into FSC Securities’ Regulatory Issues
FSC Securities (now called Osaic Wealth) has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors. Details of thirty-one (31) regulatory issues are listed below:
Fined $50,000 for Alleged Supervisory Failures in Disclosing Important Information to Investors Regarding GPB Capital Holdings’ Failure to File Necessary Documents With the Securities and Exchange Commission (AWC No. 2018060895801)
Overview from FINRA’s Disciplinary Office:
Between May 4, 2018, and June 29, 2018, FSC Securities, Royal Alliance, SagePoint Financial and Woodbury Financial negligently failed to tell investors in an offering related to GPB Capital Holdings, LLC (GPB Capital) that the issuer failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements. By virtue of the foregoing, each firm violated FINRA Rule 2010.
Fined $125,187.52 for Alleged Supervisory Failures In Overseeing 529 Plan Share-Class Recommendations (AWC No. 2019062531501)
Overview from FINRA’s Disciplinary Office:
From January 1, 2013 through June 30, 2018, Royal Alliance, Sagepoint, and FSC failed to establish and maintain a supervisory system reasonably designed to supervise 529 plan share-class recommendations in violation of MSRB Rule G-27. These three Advisor Group firms shared written supervisory procedures that did not reasonably address the share-class suitability factors specific to 529 plan investments. In addition, the firms’ transaction review system was not reasonably designed to identify 529 plan share-class recommendations that were inconsistent with the investment time horizon suggested by the age of the account beneficiary.
The firms voluntarily self-reported potential issues with their supervisory system to FINRA as part of the 529 Plan Share Class Initiative announced in Regulatory Notice 19- 04 and proposed a plan to remediate affected customers. Accordingly, the AWC includes a censure for each firm and orders of restitution and estimated interest totaling $485,441 but no fines.
Fined $200,000 for Alleged Supervisory Failures In Oversight and Training Failures In Selling Multi-Share Class Variable Annuities (AWC No. 2016047636601)
Overview from FINRA’s Disciplinary Office:
Royal Alliance (between February 2014 and December 2015) and FSC, SagePoint, and Woodbury (between January 2013 and December 2014) failed to establish, maintain and enforce a supervisory system and written procedures designed to reasonably supervise representatives’ 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. As a result, the Advisor Group Firms violated FINRA Rules 2330(d) and (e), NASD Rule 3010 (for conduct before December 1, 2014), F1NRA Rule 3110 (for conduct on and after December 1, 2014), and FINRA Rule 2010.
In addition, Royal Alliance (between February 2014 and March 2016) failed to reasonably supervise variable annuity exchanges in that it failed to implement a reasonable supervisory system and procedures to determine if any of its registered representatives had inappropriate rates of variable annuity exchanges. As a result, Royal Alliance violated FINRA Rule 2330(d), NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on and after December 1, 2014), and FINRA Rule 2010.
Fined $100,000 for Allegedly Disadvantaging Certain Retirement Plan And Charitable Organization Customers Eligible For Class A Shares Purchases Without Front-End Sales Charge (AWC No. 2017054137901)
Overview from FINRA’s Disciplinary Office:
Between January 1, 2011, and September 30, 2017 (the “Relevant Period”), FSC disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge (Eligible Customers”). These Eligible Customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. During this period, FSC failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, FSC violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and FINRA Rule 2010.
Fined $100,000 for Allegedly Making Around 6,500 Purchases Of Non-Traditional ETFs In Around 1,400 Customer Accounts (AWC No. 2010024620303)
Overview from FINRA’s Disciplinary Office:
From January 2009 through September 2014 (the URelevantPeriod”), FSC executed approximately 6,500 purchases of leveraged, inverse, or both inverse and leveraged Exchange-Traded Funds (collectively, “Non-Traditional ETFs”) in approximately 1,400 retail customer accounts. Those purchases were worth approximately $92 million and generated approximately $603,000 in commissions.
However, FSC failed to establish and maintain a supervisory system, including written procedures, reasonably designed to ensure that the Firm’s offering of Non-Traditional ETFs complied with NASD and FINRA rules. Non-Traditional ETFs have certain risks that are not associated with traditional ETFs or equities. The Firm’s general supervisory system was not sufficiently tailored to address the unique features and risks involved with these products.
From January 2009 through November 2009, FSC allowed registered representatives to recommend Non-Traditional ETFs without establishing a reasonable supervisory system or written supervisory procedures specifically addressing these products. While the Firm prohibited the offering of certain kinds of Non-Traditional EIFs in December 2009, it allowed the offering of other kinds of Non-Traditional EIFs to continue after that date without implementing a reasonable system and written procedures to supervise those offerings. Based on the foregoing, FSC violated NASD Rule 3010(a) and (b) and FINRA Rule 2010.
Also, during the Relevant Period, FSC, by and through its registered representatives, recommended non-traditional ETFs to customers without fully understanding the features and risks associated with those products. FSC allowed its registered representatives to make unsuitable recommendations of Non-traditional EIFs to many customers with conservative and moderate investment objectives and risk tolerances, some of whom were elderly. Moreover, many of those customers held the investments over extended periods of time and sustained losses of$492,485. Based on the foregoing, FSC violated NASD Rule 2310 and FINRA Rules 211 1 and 2010.
Fined $150,000 for Alleged Applying Inaccurate Accounting And Net Capital Treatment Of Investment Advisory Fees (AWC No. 2016049751001)
Overview from FINRA’s Disciplinary Office:
Between January 2010 and April 2016, Royal Alliance, FSC and SagePoint, and between January 2014 and March 2016, Woodbury applied an inaccurate accounting and net capital treatment of investment advisory fees. Subsequent adjustments to correct the net capital computations resulted in hindsight net capital deficiencies for Royal Alliance, FSC and SagePoint, and books and records violations and financial reporting inaccuracies across the Firms. During the time period of the violations discussed herein, Fields was the acting FINOP for the Firms.
Fined $200,000 for Alleged Supervisory Failures Allowing a Representative Associated With The Firm Sell Memberships In PFG (AWC No. 2012034037602)
Overview from FINRA’s Disciplinary Office:
From March 2009 until April 2010 (“Relevant Period”). J.Z.. a registered representative associated with FSC sold memberships in PFG. l.l,C (the “PFC fund”), an investment fund created by A.1′., a former FSC representative. In connection with his sale of the PFG fund memberships. .I.Z. submitted to FSC Letters of Authorization (“LOA”) signed by each of the fifteen (15) FSC customers, which authorized in aggregate approximately $ 1.6 million to be transferred from their FSC brokerage accounts to a bank account controlled by the PFG fund. FSC failed to establish. maintain and enforce a supervisory system that was reasonably designed to review and monitor third-party check requests from customer accounts, in violation of NASD Conduct Rules 3(}10(a).3010(b). 3()12(a)(1) and 3012(a)(2)(B)(i) and FINRA Rule 2010.
Fined $15,000 for Alleged Supervisory Failures In Accurately Completing Self-Assessment of Breakpoint Compliance (AWC No. 2005001437901)
Overview from FINRA’s Disciplinary Office:
NASD Rule 2110: The breakpoint self-assessment follow-up review conducted for the firm found that the firm failed to accurately complete the self-assessment of breakpoint in compliance and did not identify and review all qualifying mutual fund transactions to determine whether remedial action was necessary and failed to timely refund customers after self-assessment.
Fined $12,500 for Alleged Supervisory Failures In Reporting Trace-Eligible Transactions To Trace (AWC No. 2005001402901)
Overview from FINRA’s Disciplinary Office:
NASD Rules 2110, 3010, 6230(a) – The firm failed to report to the Trade Reporting and Compliance Engine (TRACE) transactions in trace-eligible securities executed on a business day during trace system hours within 30 minutes of the time of execution. The findings stated that the fir’ms supervisory system did not provide for supervision reasonably designed to achieve compliance with the applicable securities laws, regulations and NASD rules concerning trace reporting.
Fined $30,000 for Alleged Supervisory Failures In Reporting And Doing It On Time (AWC No. E072005019701)
Overview from FINRA’s Disciplinary Office:
NASD Rules 2110, 3070 and Article 5, Sections 2 and 3 of the NASD bylaws – between September 2003 through about July 2005, the firm failed to report 14 matters and reported one matter late pursuant to NASD Rule 3070(c); and failed to report one disclosable event on forms U4, and reported ten other events late on forms U4 or U5.
Fined $12,730,000 for Allegedly Favoring or Disfavoring The Sale or Distribution of Mutual Fund Shares on The Basis of Brokerage Commissions (AWC No. CE2050011)
Overview from FINRA’s Disciplinary Office:
This matter involves violations of NASD Rule 2830(k), which prohibits member firms from favoring or disfavoring the sale or distribution of mutual fund shares on the basis of brokerage commissions received by the firm, prohibits member firms from arranging for a specific amount or percentage of brokerage commissions to be directed to the firm conditioned on the firm’s sale of mutual fund shares, and prohibits member firms from recommending the purchase of mutual fund shares on the basis of brokerage commissions received or expected to be received by the firm from any source.
From January 2001 through December 2003, Respondents maintained shelf space (or revenue sharing) programs in which participating mutual fund complexes paid a fee in return for preferential marketing and distribution access to Respondents. The benefits provided to the mutual fund complexes included enhanced access to the firms sales force, placement of materials on the firms’ websites, and inclusion of the funds in certain marketing materials prepared or distributed by Respondents to their sales forces. Twelve of the participating fund complexes paid all or some of their fees for participating in the programs by directing approximately $41.5 million in mutual fund portfolio brokerage commissions to the Respondents. Those payments violated NASD Conduct Rules 2830(k) and 2110.
In addition, the Respondents failed to maintain e-mails for the time period required by the books and records rules. As a result, the Respondents violated Sec. 17(a) of the Securities Exchange Act of 1934, Rule 17a-4 thereunder, and NASD Conduct Rules 3110 and 2110.
Fined $40,000 for Multiple Alleged Supervisory Failures Including Submitting Timely Reports, Entering Into Settlement Agreements, And Neglecting Compliance With The Bank Secrecy Act (AWC No. C07050013)
Overview from FINRA’s Disciplinary Office:
NASD Rules IM-1000-1, NASD Conduct Rule 2110, 3011, 3070, 3070(b), and 3070 (c): Failed to report disclosable events on forms U4 and U5, and reported events late; failed to report events pursuant to Rule 3070(b) and Rule 3070(c): entered into settlement agreements with public customers that contained confidentiality clauses that failed to expressly allow customers or other persons to respond, without restriction or condition, to any inquiry about the settlement or its underlying facts and circumstances by any securities regulator, including the NASD; firm failed to develop and implement an anti-money laundering program that was reasonably designed to achieve and monitor compliance with the requirements of the Bank Secrecy Act; the firm failed to have adequate internal controls to ensure that the firm complied with its procedures regarding foreign bank accounts, private banking issues, and cash transactions with respect to filing CTR’s, or the controls to detect and prevent the receipt of cash.
Fined $100,000 for Alleged Supervisory Failures In Obtaining Verification By A Trusted Accountant Of Client Funds And Securities Under Its Control (Docket/Case Number: 3-21757)
Overview from FINRA’s Disciplinary Office:
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted against FSC Securities Corporation (“FSC” or “respondent”). In anticipation of the institution of these proceedings, respondent has submitted an offer of settlement (the “offer”) which the commission has determined to accept. The Commission finds that this matter arises out of the failure of FSC, a registered investment adviser, to obtain verification by an independent public accountant of client funds and securities of which it had custody. From June 2017 to December 2022 (the “relevant period’), FSC used a form agreement to govern certain aspects of the relationship among FSC, its clients, and a particular clearing agent FSC used (the “clearing agent”). Each of these agreements (“customer agreements”) included a margin account agreement that contained language, required by the clearing agent, that permitted the clearing agent to accept, without inquiry or investigation, any instructions given by FSC concerning these clients’ accounts (the “affected accounts”). As a consequence of FSC having this authority with respect to the client funds and securities in the affected accounts, FSC had custody of these assets. Accordingly, because FSC failed to obtain verification by actual examination of the client funds and securities in the affected accounts by an independent public accountant, FSC violated Section 206(4) of the Advisers Act and Rule 206(4)-2 thereunder, commonly referred to as the “Custody Rule.”
Fined $100,000 for Alleged Supervisory Failures Allowing a Representative to Engage In Private Securities Investments (Docket/Case Number: SEC-2015-278)
Overview from FINRA’s Disciplinary Office:
The State of Montana alleges that former FSC representative Barry Hartmab invested in private securities, sold private securities, sold unsuitable and illiquid investments. The State further alleges that the firm failed to supervise the activities of Mr. Hartman.
Fined $7,500,000 for Alleged Breach of Fiduciary Duty And Multiple Compliance Failures (Docket/Case Number: 3-17169)
Overview from FINRA’s Disciplinary Office:
Sec Admin release 34-77362, IA release 40-4351 / March 14, 2016: The Securities and Exchange Commission deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to section 15(b) of the Securities Exchange Act of 1934 and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 against the firm (respondent). On the basis of this order and respondent’s offer, the Commission finds that this proceeding arises from breach of fiduciary duty and multiple compliance failures by respondent. From at least 2012 to 2014, respondent invested advisory clients in mutual fund share classes with 12B-1 fees instead of lower-fee share classes of the same funds that were available without 12B-1 fees. The affected clients were advisory clients whom advisor group firms invested in a fee-based advisory service called the Advisor Managed Portfolio (“AMP”) in accounts that are not qualified retirement or Erisa accounts, where 12B-1 fees are rebated. In its capacity as broker-dealers, respondent received 12B-1 fees paid by the funds in which AMP advisory clients invested. By investing these non-qualified advisory clients in the higher-fee share classes, respondent and two other firms received approximately $2 million in 12B-1 fees that they would not have collected from the lower-fee share classes. Respondent failed to disclose in its forms ADV or otherwise that it had a conflict of interest due to a financial incentive to place non-qualified advisory clients in higher-fee mutual fund share classes. As a result, respondent breached its fiduciary duties as an investment adviser to certain of its AMP advisory clients by investing them in higher-fee mutual fund share classes. In Addition, respondent failed to adopt any compliance policy governing mutual fund share classes selection. During 2013, respondent also failed to monitor advisory accounts quarterly for inactivity or “reverse churning” as required under its compliance policies and procedures to ensure that fee-based advisory or “wrap” accounts that charged an inclusive fee for both advisory services and the trading costs remained in the best interest of clients that traded infrequently. Even though commission examination staff previously had cited the firm for failing to conduct such monitoring several years earlier, respondent did not conduct its inactive account review on a timely basis for the fourth quarter of 2012 and the first and second quarters of 2013. By virtue of this conduct, respondent willfully violated Sections 206(2), 206(4), and 207 of the Advisers Act and Rule 206(4)-7 thereunder.
Fined $5,000 for Alleged Supervisory Failures (Docket/Case Number: 0489-S-5/10)
Overview from FINRA’s Disciplinary Office:
On 3/30/2011, the office entered a final order adopting the stipulation and consent agreement dated 3/29/2011 whereby FSC neither admitted nor denied the findings but consented to the entry of findings by the office.
Fined $27,000 for Allegedly Earning Commissions For Selling Insurance Without A Valid License
Overview from FINRA’s Disciplinary Office:
The firm and its registered representative earned commissions for selling, soliciting and negotiating insurance policies in Illinois without a valid business entity license on two separate occasions in violation of Section 5/500-80(b) of the Illinois insurance code.
Fined $6,000 for Allegedly Conducting Securities Transactions From Unregistered Locations (Docket/Case Number: 0315-S-12/06)
Overview from FINRA’s Disciplinary Office:
Conducting securities transactions from unregistered locations.
Fined $7,500 for Alleged Supervisory Failures Allowing Respondent to Engage In Fraudulent Activities (Docket/Case Number: NEW-681)
Overview from FINRA’s Disciplinary Office:
Alleging violations of Article III, Sections 1, 18, 19(a) amd 27 of the rules of fair practice and Article IV, Section 2(C) of the by-laws in that respondent Landry, in connection with the offer and sale of general partnership interests, employed devices, schemes, and artifices to defraud and obtained money and property by means of untrue statements of material facts and omissions to state material facts; respondent Landry made improper use of customer funds; respondent Landry, in contravention of the Board of Governors’ interpretation with respect to Private Securities transactions, acted as a general partner and offered and sold securities outside the regular course and scope of his employment, without prior written notification to respondent member; respondent Landry failed and neglected to keep current by amending his uniform application for securities industry registration (“Form U-4”); and, respondent member, failed to establish, maintain, and reasonably enforce procedures which would have enabled it to properly supervise the activities of its associated persons, including respondent Landry.
Fined $5,000 for Alleged Supervisory Violations (Docket/Case Number: SE9805251)
Overview from FINRA’s Disciplinary Office:
Respondent FSC Securities Corporation allegedly violated Minn. Stat. Ch. 80A.07, SUBD. 1 (10) with reference to Minn. Rules 2875.0910 SUBP. 1.
Suspended for Allegedly Transacting Through An Unqualified Representative
Overview from FINRA’s Disciplinary Office:
The firm transacted business in Wisconsin during 1976 and 1977 through a person not qualified as an investment advisory representative in Wisconsin. In addition, the firm failed to file the required IA amendments with regard to changes in officers and that the firm failed to adequately supervise.
Revoked for Allegedly Violating Multiple Rules (Docket/Case Number: Administrative Proceeding 3-4707)
Overview from FINRA’s Disciplinary Office:
SEC alleged that the predecessor of FSC Corp. (registrant’s parent) and a sister affiliate of Registrant Financial Service Corp. of America (now dormant) violated sections 17(a), 10(b), and 15(c) (2) of SFA-1933 and Rules 10B5, 10B-9, 15C2-4 and 17A-3 thereunder.
Fined $1,500 for Allegedly Transacting Business From An Unregistered Branch Office (Docket/Case Number: CO-99-5339-S)
Overview from FINRA’s Disciplinary Office:
From at least May 1998 through August 1998, the firm allegedly transacted business from an unregistered branch office in Connecticut in violation of the Connecticut Uniform Securities Act.
Fined $50,000 for Alleged Supervisory Failures In Overseeing Branch Principals Resulting to Fraudulent Activities (Docket/Case Number: 3-9785)
Overview from FINRA’s Disciplinary Office:
The Commission found that FSC had failed reasonably to supervise the principal of one of its branch offices. As a result of FSC’s inadequate supervision, the principal of that branch office allegedly defrauded his customers by engaging in mutual fund switching, by recommending unsuitable securities, and by failing to inform his customers of material facts when selling them mutual funds. With respect to FSC’s supervisory system, the Commission specifically found that although the principals of FSC’s branch offices were responsible for supervising those who worked for them, FSC’s system of supervising the sale of securities by those principals was inadequate. Another inadequacy in FSC’s supervisory system, according to the Commission, was its failure to generate for its supervisory personnel an automated exception report that could reliably detect mutual fund switching. FSC, according to the Commission, also failed to implement procedures sufficient to assure that its compliance auditors would examine a sufficient number of customer accounts for evidence of fraud during audits of branch offices. FSC, the Commission stated, also could not document that it had reviewed an adequate number of customer accounts for evidence of sales practice abuse during the audits of the registered representative it failed to supervise.
Fined $500 for Alleged Supervisory Failures In Submitting Certified Financial Statements On Time (Docket/Case Number: SEC9900006)
Overview from FINRA’s Disciplinary Office:
FSC Securities Corporation filed certified financial statements for the fiscal year ending September 30, 1998, more than sixty (60) days after the end of such fiscal year, in violation of the commission’s securities Rule 21 VAC 5-20-290 D. For the second time.
Fined $35,000 for Allegedly Conducting Securities Business Without Registration (Docket/Case Number: 2679-S-5/98)
Overview from FINRA’s Disciplinary Office:
The Florida Department of Banking and Finance alleges that FSC Securities Corporation conducted securities business in the state of Florida through one or more branch office locations without the benefit of lawful registration.
Fined $700,000 for Alleged Supervisory Failures In Overseeing Representative Which Led To Fraudulent Activities (Docket/Case Number: 89-01-03)
Overview from FINRA’s Disciplinary Office:
On January 24, 1989, the Delaware Securities Division issued a Notice of Allegations and Order for Proceeding to Suspend or Revoke Broker-Dealer registration in the matter of FSC Securities Corporation. The Notice charged that FSC failed reasonably to supervise its agent, Autrey J. Locklear during the period of October 28, 1987 through November 17, 1988, which failure resulted in a series of frauds costing investors about $700,000.
Fined $4,000 for Alleged Violations of NASD Rules (Docket/Case Number: ATL-728)
Overview from FINRA’s Disciplinary Office:
Alleged violations of NASD Rules of Fair Practice and Municipal Securities Rulemaking Board. Specifically:
- MSRB Rule G-8 (8/31/82 – 11/30/82)
- Article III, Sections 1 and 21(a)(8/31/82 – 10/29/82)
- Article III, Sections 1 and 32 (7/18/82 – 11/30/82)
- Article III, Section 4
Fined for Alleged Issues During Examination (Docket/Case Number: 94-181)
Overview from FINRA’s Disciplinary Office:
On May 31, 1994, the administrator of the Oklahoma Department of Securities conducted a routine examination of the FSC Securities Corporation Branch Office in Durant, Oklahoma, pursuant to Section 405(e) of the Oklahoma Securities Act. In order to resolve the issues raised during the examination, FSC and the Department entered into an agreement on December 1, 1994, wherein FSC agreed to comply with all provisions of the act and the rules of the Oklahoma Securities Commission and the administrator of the Department of Securities, including but not limited to, compliance with 660:10-5-41(b)(1) of the rules. FSC further agreed that none of the personnel at its branch offices and non branch sales offices shall conduct investment advisor services without first registering under the act as an investment adviser.
Fined $1,000 for Alleged Supervisory Failures In Updating Form BD (Docket/Case Number: 931230007)
Overview from FINRA’s Disciplinary Office:
Violation of Rule 203 A of the Commission’s Rules under the Virginia Securities Act in that FSC failed to update its Form BD; specifically, FSC failed to amend a change in location of its Williamsburg, VA Branch Office.
Fined $7,500 for Alleged Supervisory Failures In Monitoring Representative (Docket/Case Number: NEW-671)
Overview from FINRA’s Disciplinary Office:
Alleged violation of Article III, Sections 1 and 27 of the NASD Rules of Fair Practice, in that applicant and executives listed below failed to adequately supervise registered representative Gene Flannes.
Next Steps and Free Consultation with Our Legal Team
If you have questions about FSC Securities (now called Osaic Wealth), its advisors, or the management or performance of your accounts, please contact our team at Patil Law toll-free at 1-800-950-6553 for a free initial consultation. Or please reach out to us through our secure and private contact form and we will call you back quickly to discuss your case.
Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date. We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money.
We can help you, as we have helped hundreds of other clients in the past. We are happy to serve you as well as to provide you with a custom report of your advisor’s and your brokerage firm’s complaints.