Sandlapper Securities could be facing expulsion from FINRA over its sale of shares in Tiburon Saltwater Reclamation Fund I LLC
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As reported in InvestmentNews, three Raymond James entities have agreed to pay over $15 million to resolve an investigation by the SEC. The settlement and SEC order focused on Raymond James’s actions in improperly charging certain clients advisory fees when the...read more
It appears that South Carolina-based brokerage firm Sandlapper Securities may be expelled from FINRA due to allegedly unreasonable and undisclosed markups it charged investors in its sale of shares in the private placement investment Tiburon Saltwater Reclamation Fund I LLC. [The decision is not final though, Sandlapper has denied any wrongdoing, and is appealing the FINRA hearing panel’s decision.]
The situation originated with a businessman named Randy B. Jones who constructs and operates saltwater disposal wells that service the oil industry in the United States. Saltwater is a byproduct of oil wells, and Mr. Jones’s business entities charge oil well operators a fee to pump the saltwater back into the ground in an environmentally responsible manner.
The founder and CEO of Sandlapper Securities, Trevor Gordon, and the president of Sandlapper Securities, Jack Bixler, offered to raise money for Randy B. Jones’s saltwater removal enterprises.
As reported in the DI Wire Gordon and Bixler created TSWR Development to purchase the saltwater disposal wells from Mr. Jones. But the Sandlapper executives failed register TSWR as a dealer of securities.
A FINRA hearing panel concluded that TSWR Development was in essence a shell entity that was used as an excuse to charge massive markups (from 67% to 376% of acquisition costs) to the eventual investors in Tiburon Saltwater Reclamation Fund I LLC. Again, the decision by the FINRA hearing panel is being appealed by Sandlapper, and is not a final, binding decision.
It is worth mentioning that Sandlapper Securities was one firm targeted in an investigation by the Wall Street Journal into a pattern of sales of private placement investments by brokerage firms with a high number of brokers who had red flags from FINRA.
If you or a loved one has lost money investing in an unsuitable alternative investment or private placement investment call the experienced FINRA Arbitration attorney at Epperson & Greenidge, LLP for a free consultation (877) 445-9261 or contact us on-line.