The maximum interaction range is an optional parameter that can be set in the DynamicalMatrix analysis object. When calculating the dynamical matrix, this parameter specifies the distance around a displaced central atom (i) in which the derivative of the forces on atoms (j) are taken into account to calculate d^2 U / dr_i dr_j .
If this parameter is not specified, the default values are used (which are the covalent distances multiplied by a fuzz factor of 4.0). In most cases this works well, but when e.g. a classical potential is used, which has a large cutoff radius (e.g. CoulombDSF (
http://www.quantumwise.com/documents/manuals/latest/ReferenceManual/index.html/ref.coulombdsf.html) with a default of 9 Angstrom), then the maximum interaction range parameter has to be increased to be larger than this cutoff radius, i.e. larger than 9 Angstrom, to avoid discontinuities.
You can find out if large cutoff values are used by your potential, if you send the script to the Editor with the "Script details" parameter set to "Show defaults". Then all the details of the classical potential are reflected in the script.
Which exact potential are you using?
Apart from that, negative frequencies might also occur if you are sitting exactly at a local maximum (e.g. due to symmetries in your structure). In this case, small random displacements to the atoms followed by another accurate geometry optimization should lead you to a minimum.