ADMINISTRATIVE PROCEEDING
File No. 3-20163

December 8, 2020 - The Securities and Exchange Commission today announced settled charges against Fairmount Santrol (now known as Bison Merger Sub I, LLC) and its successor after a merger, Covia Holdings Corporations, for Fairmount overstating the performance and commercial potential of high-margin products it was developing and selling to oil and gas exploration companies for use in fracking.

According to the SEC's order, Fairmount touted its development of three high-margin products as a way to differentiate the company from its competitors, and told investors that the development of the products would provide long term and sustainable value for investors. As set forth in the order, however, from 2014 to March 2018 Fairmount misrepresented that one of the products, its premium resin-coated sand PowerProp, had performance characteristics similar to higher performing lightweight ceramics sold by competitors, and that two of its other products, Propel SSP and Propel SSP 350, increased oil and gas production in a large number of test wells. The company ultimately discontinued sales of these products. According to the order, Fairmount made the materially false and misleading statements in connection with securities offerings in 2014 and 2016, in periodic and current reports filed with the SEC, in presentations to investors and research analysts, and on the company's website. Fairmount and Covia filed chapter 11 bankruptcy cases in June 2020.

Fairmount and Covia agreed, without admitting or denying the SEC's findings, to cease and desist from violating Sections 17(a)(2) and 17(a)(3) of the Securities Act and Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. Covia and Fairmount also agreed to pay a joint and several penalty of $17 million that, in light of the ongoing bankruptcy proceeding, will be deemed satisfied by a $1 million cash payment to the SEC. The SEC plans to distribute the $1 million cash payment to harmed investors.

The SEC's investigation was conducted by Roger Landsman, Gosia Spangenberg, and Bert Braganza, under the supervision of Lisa Deitch and Peter Rosario. The team received assistance from SEC bankruptcy counsel Angela Dodd and Alistaire Bambach and SEC trial counsel Duane Thompson and Stephan Schlegelmilch.