The allegations read: On august 19, 2015, the securities division entered a statement of charges and notice of intent to issue an order to cease and desist, deny future registrations, suspend current registrations, impose fines, and charge costs against [third party], frank h. Black, and southeast investments, n.c., inc. (collectively "respondents"). [third party] engaged in excessive trading in his customers' discretionary brokerage accounts. From 2009 through 2012, due to the excessive trading and use of a commission-based compensation structure, [third party] generated approximately $5.3 million dollars in commissions from trading his customer accounts. The commissions received by [third party] were unreasonable and constituted a high percentage of the customer's average portfolio value. The commissions were also unreasonable compared to what customers would have been charged with fee-based accounts. Black was the designated supervisor for [third party], who while subject to black's supervision violated the securities act of washington. The securities division alleges that black failed to reasonably supervise [third party] by approving his commission schedule. The securities division further alleges that southeast investments failed to maintain adequate supervisory policies and procedures regarding the review of discretionary accounts, and as a result black failed to adequately review [third partys'] accounts for excessive trading. The securities division ordered the respondents to cease and desist from violating the securities act of washington. The securities division gave notice of its intent to impose fines, to recover costs, and to deny and suspend securities registrations. The respondents have a right to request a hearing on the statement of charges.
