On Tuesday, FINRA’s National Adjudicatory Council affirmed the expulsion of broker-dealer Sandlapper Securities, as well as the bar of founder and chief executive officer Trevor Gordon and the firm’s principal and president, Jack Bixler.
Gordon and Sandlapper were also ordered to pay restitution totaling $2.4 million, plus interest, and Gordon was also individually ordered to pay additional restitution of nearly $4.7 million.
In November 2018, FINRA’s Office of Hearing Officers determined that Sandlapper Securities, through Gordon and Bixler, willfully committed securities fraud by charging unreasonable and undisclosed markups totaling more than $8 million on sales of fractional interests in saltwater disposal wells. Sandlapper and the two executives attempted to overturn the decision by appealing to the NAC.
Around the time of the OHO decision, Sandlapper issued an email claiming that this is FINRA’s first case involving mark-ups in sales of saltwater disposal well interests and that the panel ignored certain evidence including no investor lost money in the deal. Sandlapper and its executives claimed that the “decision was based on erroneous factually and legal conclusions.”
In an interview with InvestmentNews yesterday, Gordon indicated that he was “exploring with his attorneys a potential appeal to the Securities and Exchange Commission about the decision.”
“This is a case where process was punishment,” he said. “We spent millions defending this.” Gordon also told the publication that investors saw returns in the triple-digits.
Sandlapper, which received a suspension notice from FINRA in April 2020, has approximately 60 registered representatives in 13 branch offices. FINRA stated, “Sandlapper Securities is suspended on April 27, 2020 from FINRA membership. If Sandlapper Securities fails to request termination of the suspension within three months of the date of the notice of suspension, it will automatically be expelled from FINRA membership.”