Finra suspends broker-dealer it previously charged with fraudulent markups

The regulator charged Sandlapper Securities in 2017 with exorbitant markups of securities

The Financial Industry Regulatory Authority Inc. last month suspended Sandlapper Securities, which it charged in 2017 with defrauding investors with exorbitant, undisclosed markups totaling more than $8 million on private placement deals.

Sandlapper Securities is a small broker-dealer that created and sold private placement investments in saltwater disposal wells. Such wells are used to get rid of water collected as a byproduct of oil and gas production.

The firm is facing the prospects of being kicked out of the brokerage industry if it doesn’t respond to Finra’s latest move involving the firm, according to its BrokerCheck profile. “If Sandlapper Securities fails to request termination of the suspension within three months of the notice … it will automatically be expelled” from Finra, according to the firm’s BrokerCheck profile.

Sandlapper’s CEO, Trevor Gordon, did not return calls on Thursday to comment.

When Finra filed its complaint against Sandlapper two-and-a-half years ago, it reported that the firm had close to 60 registered representatives in 13 branch offices.