Elderly Investors Sue Local Stockbroker For Losses

FOR THE RECORD: Wednesday, December 13, 1995 CORRECTION: The disciplinary history of Spokane securities dealer David M. Black shows only one complaint with the National Association of Security Dealers in Black’s 26 years of investment counseling. That 1986 complaint, based on low net capital requirements, did not involve a customer. A Dec. 5 story implied Black had a history of disciplinary problems with NASD.

An elderly Benton County couple has sued a Spokane stockbroker for fraud and other actions that substantially depleted their account.

Henry and Edith Smith allege Dave Black, who had complete control of their account from 1978 through 1994, charged excessive markups on the transactions he handled.

He also engaged in excessive trading to increase commissions paid to the brokerages he owned, Black & Clark Securities Inc. and D.M. Black & Co. Inc., according to the complaint filed in U.S. District Court.

And the investments Black made were unsuitable for unsophisticated, retired investors like the Smiths, the filing adds.

The Smiths claim Black violated federal and Washington securities laws and breached his fiduciary and contract responsibilities.

Their losses are unspecified in the complaint, but attorney Michael Hines said they run into the hundreds of thousands.

The couple is seeking restitution, compensation for emotional distress, and punitive damages of more than $250,000.

Earlier this year, Black was ordered by the National Association of Securities Dealers to return $33,000 to Edith Smith for excessive markups on bond transactions.

In one annuity account in Edith Smith’s name, the NASD said, $2 million in transactions between 1986 and 1993 yielded $108,000 in commissions and other payments to Black and D.M. Black & Co., but only $15,000 in profits to her.

He was also fined $15,000 and censured.

Black has a history of disciplinary problems with the NASD, the order added.

Hines noted that the Dave Black named in the complaint is not the Dave Black of the James S. Black Commercial real estate firm in Spokane.

, DataTimes