President of Charlotte investment firm faces possible industry ban

The president of a Charlotte brokerage firm faces a possible industry ban for allegedly giving false testimony about required branch inspections, according to a regulatory decision disclosed last week. The March 3 order came after the Financial Industry Regulatory...

President of Charlotte investment firm faces possible industry ban

The president of a Charlotte brokerage firm faces a possible industry ban for allegedly giving false testimony about required branch inspections, according to a regulatory decision disclosed last week. The March 3 order came after the Financial Industry Regulatory...

08 mart 2017 Wednesday 15:57
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President of Charlotte investment firm faces possible industry ban

The president of a Charlotte brokerage firm faces a possible industry ban for allegedly giving false testimony about required branch inspections, according to a regulatory decision disclosed last week.

The March 3 order came after the Financial Industry Regulatory Authority’s enforcement department alleged Frank Black and Southeast Investments provided fabricated documents and made false testimony to FINRA about whether the firm conducted required inspections of five branches.

Black and Southeast also failed to ensure that business-related emails were preserved, the order from a FINRA panel states.

After holding a hearing in Charlotte in September, the panel determined that Black should be barred from associating with any FINRA-member firm in any capacity. It also fined Charlotte-based Southeast Investments a total of $243,000.

Black and Southeast Investments have denied all of the allegations, contending they performed all required branch inspections and that the firm’s system for retaining emails was suitable, according to the order.

In a brief interview Wednesday, Black said he plans to appeal the decision. “This is just a step in the process,” he said.

According to the order, Black entered the securities industry in 1971 and formed Southeast Investments in 1997. As of 2015, the firm had 33 registered branch offices and about 133 registered representatives, who are independent contractors located around the country. Many of the brokers maintain their offices at their homes, according to the order.

The firm makes its revenue from selling variable annuities, mutual funds and real estate investment trusts. Black is the firm’s president, chief compliance office and chief financial officer.

The case stemmed from FINRA examinations dating to 2012, according to the order.

The order said that Black’s records regarding branch office inspections were unreliable. For example, Black testified that he was inspecting an office in Augusta, Georgia, in 2010, but FINRA staff testified that he was actually in Charlotte that day for a FINRA examination.

The order says that if the panel’s decision becomes final, Black’s bar from the industry would begin immediately.

Rick Rothacker: 704-358-5170, @rickrothacker

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