RALEIGH — State Sen. Tony Rand was re-elected to the Law Enforcement Associates board Thursday during an annual shareholders meeting where he was asked pointed questions about the solvency of the company and how itplans to handle accusations of misconduct made by LEA's former president.
The questions came after Rand was quickly and quietly elected to the board with four others, including LEA's interim president and CEO, William Alan Terry, and W.Lyndo Tippett, a former N.C. secretary of transportation.
The only questions asked of Rand came from two attorneys representing Barbara Wortley. Wortley filed a lawsuit against LEA in September contending that the company owes her $1.5 million under a 2007 agreement in which she sold her Florida company, Advanced Vehicle Systems, to LEA. LEA filed a motion to have the lawsuit dismissed last month.
Bill Gates, an attorney with Liberty Associates, asked Rand why LEA did not hold an annual shareholder meeting in 2008.
"We never got one called," Rand said.
Gates asked whether the company was working with bankruptcy attorneys.
"I don't think so," Rand said. "I mean, we've got lawyers. I don't know if some of them are bankruptcy lawyers or not."
Both Gates and Walter Tippett Jr., an attorney with Ragsdale Liggett PLLC, asked how LEA planned to investigate the claims made by Paul Feldman, LEA's president from 1993 until he was fired in August.
In a Nov. 17 complaint filed with the U.S. Department of Labor and disclosed this week, Feldman said Rand schemed to profit from insider trading and manipulated the value of the company's stock. Feldman also alleges that he saw a list that included about 50 North Carolina politicians who bought large amounts of LEA stock in 2004 and 2005.
He also contends that Rand and other LEA executives violated federal export laws and submitted false information to securities regulators.
Rand said again Thursday that the accusations are lies.
Mark Finkelstein, LEA's legal counsel, said the company is taking the allegations seriously and has hired an outside investigator to look into them. When Tippett, Wortley's lawyer, asked the name of the outsider, Finkelstein refused to provide it.
"Who the person is is not germane to the operating of the company," he said.
Wortley's lawyers have subpoenaed Feldman as part of their lawsuit. LEA has, in turn, filed a motion asking that Feldman be prohibited from disclosing any confidential or privileged conversations or documents.
Rand, a Fayetteville Democrat who is stepping down as state Senate majority leader this month, has been chairman of LEA's board since 2003. The company makes security and surveillance equipment but has struggled with declining sales. The meeting Thursday was held at the company's North Raleigh headquarters and attended by about a dozen shareholders.
The company's stock, which surged above $10 in late 2005, hasn't traded above $1 for more than two years. On Thursday, it fell 1 cent to 13 cents. According to SEC filings, Rand owns 140,000 shares, and Lyndo Tippett owns 36,000 shares.
Asked after the meeting why LEA did not hold an annual shareholders meeting last year, Rand chalked it up to company growing pains.
"We just kind of stumbled along in this public company thing," Rand said.
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