Convicted financier tied to Nashville musicians starts new busin - WSMV Channel 4

Convicted financier tied to Nashville musicians starts new business

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NASHVILLE, TN (WSMV) -

He was a financial adviser to the stars, and his actions years ago resulted in a felony conviction.

That’s why several musicians contacted the Channel 4 I-Team after learning he had started a new business.

Larry Cherry himself admitted he lost $3.5 million dollars of his clients’ money.

He said he’s paid the price for it, but former clients said they’re concerned.

Beth Nielsen Chapman, Bill Lloyd and Pam Rose are all accomplished musicians, as well as former clients of Cherry.

Cherry was a financial adviser. Several lawsuits accused him of squandering investments for former clients, people who ranged from celebrities to a judicial assistant.

All that happened more than 15 years ago.  

“Larry Cherry is responsible for taking my security and my children’s future,” said Darlene Pridemore, who sued Cherry when she still lived in Nashville.

Chapman, Lloyd and Rose said they never received all the money Cherry owed them. For Chapman, that means more than $25,000.

So imagine their reaction after learning Cherry had started another business in Tennessee. The website states the company offers business consulting.

“If he’s doing really well, I’d love to get reimbursed for what he took,” Chapman said.

According to a business ethics expert, while Cherry’s new company may be unrelated to his previous activities, potential clients need to hear about his past.

“Sharing your financial information with someone who may not be trustworthy or has a history of not being trustworthy is something I would advise someone to do very carefully,” said Pat Raines, the dean of the Jack C. Massey College of Business at Belmont University.

The new business is called SDG Communications, and the website touts “behaviorists who understand the financials.”

It’s a statement Pam Rose finds interesting.

“The people who he victimized have spent years, decades trying to straighten out their lives,” Rose said.

A report from the Associated Press estimated he had 125 clients. Chapman said at the time, she was battling breast cancer, and the hospital bills kept piling up.

“It was a real punch in the gut, and you know, so frustrating,” Chapman said.

Court documents state Cherry had tried opening a nightclub using investments from several clients.

When that flopped, Cherry left town. He even faxed a letter from Utah, admitting to his clients he had made a “serious mistake.”

But according to Darlene Pridemore, it was not Cherry’s first mistake.

“Never, ever can I put this behind me,” said Pridemore, who has since moved to Florida.

Pridemore hired Cherry in the early 1990s. She said she was evicted from her Bellevue home after court documents show Cherry took over the title.

An appellate judge called Cherry’s actions “reprehensible” and awarded Pridemore $150,000 in compensatory and punitive damages.

“It changed the entire course of my life and my children’s lives,” Pridemore said.

Cherry was arrested in 2002, and even though he was charged with multiple counts of theft and money laundering, he was convicted on just one felony count: failing to register as a broker/dealer of securities.

He served three years of probation.

“My concern is he will repeat that poor behavior,” Rose said.

But there are some things Cherry is banned from repeating. The U.S. Securities and Exchange Commission barred him from acting as a broker or investment adviser.

So what is Cherry doing now?

According to its website, SDG analyzes internal reports, income statements, balance sheets and tax returns.

To find out more, we wanted to talk to Cherry.

When we visited the listed business address, a woman told us she “may or may not know Larry Cherry.”

Cherry later sent us several e-mails, declining an on-camera interview. He did say that he vowed to never invest anyone’s money again.

Cherry stated he exclusively works with small business owners who face difficulties or want to grow their business.

He wrote, “It is my job to understand the difficulty, how it occurred, offer solutions and then help to implement those solutions.”

Even though SDG steers clear of investment advising, Raines said what happened fifteen years ago is still relevant to new consumers.

“I don’t think the time frame really matters,” Raines said. “It’s what the individual has the capacity to do. And clearly, in this case, there was the capacity not to do the right thing.”

In 2001, Cherry’s assets were placed in a receivership.

By 2010, the receiver in charge of the receivership determined more than $2.5 million dollars should have been paid to the affected clients who filed claims, according to court documents.

In the end, clients who filed claims collectively received $326,613.

Cherry told the I-Team perhaps some clients did not receive all their money because how the receivership was handled.

Court records show the receiver who first handled the receivership was removed from the case in 2006.

Cherry said on one occasion, the receiver paid himself twice with money in the receivership.

That receiver admitted to misconduct in another case, but it’s unclear if any wrongdoing was committed in this case.

Robert Moore, the former chief counsel for Insurance, Securities, Consumer Affairs and TennCare Oversight at the Tennessee Department of Commerce and Insurance, said he was involved with the receivership at the time.  

Moore said he recalled Cherry had so few assets to begin with there would not have been much to distribute to clients in the end.

Cherry said he also paid claims outside the receivership.

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