By Dan McCue

Charleston Southern University may have distanced itself from former professor Al Parish by terminating his employment after the U.S. Securities and Exchange Commission accused the well-known local economist of investment-related fraud, but it hasn’t inoculated itself against litigation stemming from his alleged misappropriation of $134 million in investors’ funds.

The Baptist university has been sued by five of those investors, who charge that the school effectively served as a base for what they’ve now come to believe was nothing more than an elaborate con pulled off by a man who once was one of the school’s highest profile employees.

Also named as defendants in the civil suit are Parish, his wife Yolanda, Parish Economics LLC, Summerville Hard Assets LLC, Battery Wealth Management Inc. of Mount Pleasant and Battery Wealth Management President Wayne Cassady.

The plaintiffs are L.G. Elrod, Mary Elrod, Amy Williams, Jerry R. Williams and Tommie Williams.

Mount Pleasant attorney Mary L. Arnold, who filed the complaint in the Charleston County Court of Common Pleas, said her clients contend that Parish routinely used his office at CSU to conduct his investment business, meet with clients, collect payments and render payouts to investors.

“He also used his affiliation with CSU to promote his investment pools through the Internet and other means,” she said.

The lawsuit alleges that CSU officials were well aware of these activities and also should have known that Parish did not possess the proper licenses to conduct an investment business.

It further alleges that CSU acknowledged its own reservations about Parish’s investment acumen. The university allegedly obtained life insurance on the economist sufficient to meet its exposure in one fund managed by Parish, his Summerville Hard Asset Fund, but not those of other investors in the fund.

“My clients are all nice folks from the Moncks Corner area who believed in a man who is now alleged to have perpetrated a huge fraud,” Arnold said. “Since we filed suit, I’ve heard from additional investors, and I anticipate the list of plaintiffs will grow.”

Arnold said in light of the size of the Charleston County court docket, she anticipates the lawsuit will take 18 to 24 months to get to trial.

Asked what compensation her clients are seeking, Arnold declined to be specific.

“At this point we’ve chosen not to disclose their total investment dollars, but I can tell you that we’re hoping to recover their missing funds along with some sort of appropriate return on their investment,” she said.

“I don’t know that Mr. Parish’s percentages of an expected return are valid, not remotely, but I’m sure we could arrive at a market-based determination of what these investments would have amounted to had they been handled appropriately,” Arnold said.

CSU’s attorney, J. Rutledge Young Jr., of Young, Clement and Rivers LLP, could not be reached for comment on the lawsuit Thursday morning.

In the meantime, CSU is continuing to evaluate the future of its Economic Forecasting Center, which Parish directed until his recent termination, said Allie Osman, the university’s director of public relations.

Of the $10.66 million the university invested with Parish, $5.3 million was from the institution’s $15.6 million endowment investment pool. The remaining $5.3 million was from operational reserves.

“The university will restore the endowment and has a plan to manage this situation positively,” Osman said, stressing that university personnel and student scholarships will not be adversely affected. 

“While this situation will require budget adjustments and possible delay of capital projects, Charleston Southern has operated in the black for 22 consecutive years and plans to continue to do so,” Osman said.