FINRA has barred Frank Black and his firm, Southeast Investments N.C. Inc., for failing to keep business-related emails and to comply with pertinent securities law, according to a FINRA panel. The regulator also claims he gave false testimony during an on-the-record interview and gave falsified documents pertaining to the company’s branch office inspections.
In September 2012, FINRA asked Black for documents showing the firm’s branch office inspections, the panel stated. Black allegedly provided a three-page inspections calendar, showing forty-three brach offices Black purported to have inspected from March 2010 to August 2012.
FINRA personnel “found anomalies that undercut [Black’s] credibility and the reliability of the documents he provided to evidence his purported branch office inspections,” the panel stated. Four ex-Southeast Investments’ brokers testified that neither Black nor anyone from the firm ever conducted an inspection of their branch offices.
Frank Black, who claimed to have driven long distances and through the night to perform the examinations, asserted that each of the brokers falsely testified at the hearing because they carried a grudge or some ill will against him as a result of being discharged by Southeast Investments, according to the decision. He disputed the brokers’ testimony and insisted he had conducted the branch inspections, according to FINRA.
Southeast Investments posted $8 million in revenues and a net loss of $168,500 in 2015, according to a filing with the Securities and Exchange Commission. The Charlotte, N.C.-based firm, which Black opened in 1997, has close to 130 registered reps, according to FINRA. Forty percent of the firm’s revenues are from sale of variable annuities; 40% from mutual funds; and most of the remaining 20% from real estate investment trusts, according to the Finra panel.When broker-dealers have histories of lying, this can potentially have catastrophic effects on their clients. The Frankowski Firm has years of experience representing investors who have lost money as the result of brokers’ schemes. If you or someone you know has lost money as a result of such a scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.