The Securities and Exchange Commission has permanently barred a former California-based broker from the securities industry on charges he fraudulently raised $14.1 million from over 100 investors in a Ponzi scheme disguised as a futures investment, according to a ruling issued by an administrative law judge on Thursday.


The SEC said that Gordon A. Driver and his firm Axcess Automation LLC devised a scheme in which he solicited friends, neighbors and business acquaintances to wire transfer funds into bank accounts over which he had sole discretionary authority.


Driver, according to the SEC, prepared and provided false statements to certain investors and misappropriated approximately $10.7 million from new investors to pay old investors and approximately $1.1 million for personal use.


During the period in which Driver raised the $14.1 million, from February 2006 to May 2009, he resided in Southern California and acted as an unregistered broker for Axcess, which was a Nevada limited liability company created in October 2007. Driver acted as Axcess' manager, signed its bank accounts into which investors wired funds and had sole discretionary authority over the accounts through which he traded investor funds.


Driver falsely told investors that he would use their funds to trade "e-Mini S&P 500 futures" using proprietary software, and that he would provide investors with a return of 1% and 5% weekly, according to the SEC. Besides soliciting from friends and neighbors, Driver hired "finders" to recruit additional investors. He directed investors to wire transfer their funds into his personal bank account or into an account held in Axcess' name, according to the SEC.

Driver used $3.7 million of the $14.1 million deposited into these accounts to engage in futures trading, resulting in a cumulative loss of $3.55 million, the agency said.

In February 2009, Driver mailed an annual statement on Axcess letterhead to 47 investors, falsely showing an account balance of $9.6 million as of December 31, 2008, when, in fact, Driver only held a total of about $276,000, according to the SEC.


The SEC's decision bars Driver, a resident of Las Vegas and Hamilton, Ontario, from association with any broker, dealer, investment advisor, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization. It also bars him from participating in any offering of penny stock.

The SEC's decision comes nearly two years after Driver first appeared the California Central U.S. District Court in Los Angeles which issued a final judgment that permanently enjoined him from violating federal securities laws.

SEC Public Affairs Director John Nestor said that Driver can appeal the SEC's ruling to the full SEC Commission. If his appeal is unsuccessful, Driver can appeal in the federal courts.

--Jim McConville