The Security and Exchange Commission (SEC) has ruled that Canadian Gordon Driver is permanently barred from the securities industry.
The SEC also states that Driver solicited funds from family, friends, neighbours and business acquaintances to wire transfer funds into bank accounts over which he had sole discretionary authority. Driver raised 14.1 million and told potential investors he had proprietary software, and would use their funds for trading “e-Mini S&P 500 futures,” promising returns of 1 to 5% a week.
The SEC says Driver used $3.7 million for trading, there was a loss of $3.55 million.
The SEC also states Gordon Driver hired finders to solicit new investors from their circle of family, friends and business acquaintances. Reynold and Ronald Mainse of Crossroads Christian Communications Inc and cousin David Rutledge who was a former Crossroads employee, were named by the Ontario Securities Commission as finders for Axcess Automation/Funds. Ronald Mainse and David Rutledge settled with the OSC in April 2010. An OSC hearing for Reynold Mainse and Steven Tayor was scheduled for April of this year.
From 2006 to 2009 the SEC says Gordon Driver operated as an unlicenced broker.
In February 2009, he sent out a false annual statement showing an account balance of over 9 million dollars for the year ending December 2008. The SEC says the actual balance was about $276,000.
The SEC decision comes two years after Gordon Driver was in California District Court. A final judgement was issued prohibiting him from violating US federal security laws. The SEC initial decision states:
Driver’s actions were egregious and recurrent. Driver engaged in a “ponzi scheme” spanning more than three years causing substantial harm to over 100 investors. He provided false and misleading information to certain of those investors and “finders.” Additionally, Driver used significant investor funds for his own benefit.
Driver acted with scienter. Driver had sole discretion and authority over the bank accounts into which he directed investors to wire transfer their funds. He had actual knowledge
of the trading losses he was incurring, while at the same time continuing to provide false and misleading information to investors regarding the account balances.
Driver has not admitted the wrongful nature of his conduct. In his Answer, he denies the Division’s allegations to which he previously consented, asserting several affirmative defenses.
Likewise, he has made no assurances against future violations. Throughout his Deposition, Driver asserted his privilege against self-incrimination under the Fifth Amendment. (Div. Ex. 4 at 5-40.) Without an associational bar, the potential for Driver’s future violations remains.
Further, the Commission has often emphasized, the public interest determination extends to the public-at-large, the welfare of investors as a class, and standards of conduct in the securities business generally.
Driver represented himself, after several delays. He was granted time to find a new attorney, was given 30 days to file his answer to the administrative judge and failed to meet the deadline. Driver received another extension to file his answer and did not file opposition to the SEC motion. The SEC has ordered:
that, pursuant to Section 15(b)(6)(A) of the Securities Exchange Act of 1934, Gordon A. Driver is barred from association with any broker, dealer, investment adviser,
municipal securities dealer, municipal advisor, transfer agent, and NRSRO, and from participating in an offering of penny stock.
The initial decision ruling was issued Thursday. Driver has 21 days to appeal upon receipt of the ruling, 10 days to file a motion to correct manifest error of fact and 21 days after that to file a petition for review. Appeals go before the full SEC Commission and if Driver’s appeal is unsuccessful he has recourse to go to US Federal Court. If there are no appeals by Driver or the SEC, the SEC will issue a final ruling.
There is no word on further decisions by the CFTC or the OSC. He is forbidden from trading in Canada. Gordon Driver lives in Las Vegas and has a home in Freelton Ontario.