Wayne Cassaday, a former business partner of fallen economist Al Parish, ignored red flags that Parish was deceiving investors and failed to alert authorities when he noticed inconsistencies in the economist's financial web, according to a federal sanction handed down Wednesday.

Cassaday and Parish co-owned Battery Wealth Management, a local investment firm through which Parish pitched some of his fraudulent investment pools.

Parish was convicted of running a Ponzi scheme that defrauded hundreds of investors out of an estimated $66 million, and he was sentenced in June to 24 years in federal prison.

Battery Wealth Management, of which Cassaday is president, sold some $6.5 million of the bogus investments to 25 of its clients.

Cassaday 48, of Mount Pleasant, has maintained that he knew nothing of his partner's deception.

But in its ruling, the Securities and Exchange Commission said Cassaday had ample evidence that something was awry with Parish's dealings. "Cassaday ignored certain facts that strongly suggested that Parish was likely deceiving advisory clients," the commission said.

For example, Cassaday was familiar with Parish's income and should have known that it could not have supported Parish's lavish and flamboyant lifestyle, according to the commission.

As far back as the fall of 2006, several months before federal authorities began examining Battery's books, Cassaday learned that Parish was experiencing cash flow problems and he later found out that one of Parish's properties might be facing foreclosure.

Cassaday also knew that Parish failed to deliver money to one of Battery's clients within the required five-day period, instead needing six weeks to return the investor's money.

"Nevertheless, Cassaday never took any steps to follow up on these red flags," the commission said.

The commission's order censures Cassaday's company and bars him from associating with any investment advisers, though he can reapply for that right after one year. It also orders him to pay back $6,731 in proceeds from the defunct pools and pay a $40,000 civil penalty.

Cassaday could not be reached for comment Thursday.

Battery Wealth counsel Chip Emge, an attorney with Carlock, Copeland, Semler & Stair, said he did not have any comment on the filing because he represents Battery Wealth only in several pending civil cases against the company.

Attorney Allan Holmes, who represents Cassaday, said he had not yet read the filing and had no comment.

When the Ponzi scheme came to light last year, Cassaday claimed to have no knowledge of Parish's investment scam.

"I was thunderstruck yesterday to learn the depth of Dr. Parish's fraud," Cassaday said in a written statement in April 2007. "I was deceived by Dr. Parish like every other investor and I have done nothing wrong."

Reach Ron Menchaca at rmenchaca@postandcourier.com or 937-5724.