Yesterday, The DI Wire reported that FINRA had expelled Sandlapper Securities and barred its chief executive officer Trevor Gordon and president Jack Bixler for defrauding investors by charging unreasonable and undisclosed markups on sales of fractional interests in saltwater disposal wells.
Unfortunately, our initial reporting on this story indicated that the issue was final, when in fact, it was the decision of a FINRA hearing panel. FINRA’s disciplinary proceedings are lengthy processes with multiple steps – the first of which is the recommendation of a hearing officer. We updated our story as soon as we realized the error, but apologize to our readers and Sandlapper for the mistake and any confusion that resulted.
The Office of Hearing Officers is an independent office of adjudicators who preside over disciplinary cases brought by FINRA’s Department of Enforcement and are not involved in the investigative process. Respondents may appeal a hearing panel decision to the National Adjudicatory Council, which Sandlapper has done. All sanctions are stayed until their decision is issued.
Yesterday, 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’s decision ignored certain evidence including no investor lost money in the deal. Sandlapper and its executives maintain that the “decision was based on erroneous factually and legal conclusions.”
The DI Wire will continue to monitor and report on this matter as it winds its way through FINRA’s disciplinary process. Again, we regret the error.