NASD Arbitration Panel Slams FSC Securities For Failing To Supervise and Prevent Selling Away Fraud By Broker

The arbitrators issued a written decision finding that FSC created "an extremely cozy environment for a man bent on defrauding his customers." The broker, Scott Hollenbeck, faces both criminal and civil charges for his involvement in a Ponzi Scheme using the sale of investments in billboards from 2001 to 2004. The broker previously had been fired for embezzling money from a church organization. But FSC Securities ignored that fact and hired him anyway,

The panel awarded a group of clients compensatory damages, interest and attorneys' fees.

Source: Investment News