Precious metals dealers charged in scheme against elderly investors

Mississippi officials have joined representatives of 29 other states with a legal action against a concern accused of soliciting millions of dollars from seniors and other “vulnerable” investors nationally through attempting to sell precious metals at grossly inflated prices the concern did not disclose.  

Mississippi Secretary of State Michael Watson, represented by the state Attorney General’s office, joined the states and the Commodity Futures Trading Commission in filing the complaint against Metals.com and Barrick Capital, Inc. The filing was made in U.S. District Court for the Northern District of Texas. 

According to a news release from Watson’s office, the amount of money solicited from seniors in Mississippi is more than $350,000.  

“They capitalized on investors’ fear of market instability and took advantage of hard-working Mississippians,” said Watson. “Our investors suffered consequential losses from retirement savings, and it’s only right that we take action. We’re working closely with the Attorney General’s Office to ensure the victims of this case receive justice, and we encourage all investors to thoroughly scrutinize and research any investment opportunity or offer.”

The complaint names TMTE Inc., also known as Metals.com, Chase Metals Inc., Chase Metals LLC, Barrick Capital Inc., along with Simon Batashvili, Lucas Asher, and Tower Equity LLC, all based in Los Angeles, California.

They are accused using cold calling, television, radio, and social media advertisements designed to “instill fear in elderly and retirement-aged investors and build trust with investors based on representations of political or religious affinity.” 

Investors were advised to liquidate their holdings at registered investment firms to fund investments in precious metals bullion through self-directed individual retirement accounts and bullion coins, the complaint said.

The defendants also are accused of failing to disclose, among other things, the markup Metals.com and Barrick charged investors for their precious metals bullion products and that investors could lose the majority of their funds immediately upon completing a transaction. 

The defendants charged investors prices for gold or silver bullion averaging from 100 percent to more than 300 percent the melt value or spot price of that gold or silver bullion. 

In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase.

CFTC Chairman Heath Tarbert said the joint effort among the states and his commission is “historic.”

“This is an important step toward rooting out fraud across the country,” said Tarbert. “This case highlights just how geographically broad commodities fraud can be in our rapidly-evolving financial markets and how important it is for regulators at all levels of government to work together to pursue bad actors and protect market participants.”

Mississippi Attorney General Lynn Fitch said her office is committed to protecting the rights of Mississippi consumers. 

“The defendants were preying on seniors and other vulnerable persons, grossly misrepresenting the value and likelihood of financial profit of the investments they were selling and scamming consumers out of their retirement savings,” said Fitch. “I appreciate the work of the Secretary of State in this matter.”

The legal move seeks the firms to stop sales activities, return investors their money, and would issue a cessation of defrauding investors and violating federal and state laws going forward. The complaint also requests that a receiver be appointed to take over the companies to marshal funds for the benefit of investors across the country.

The coordinated state and federal action to put a stop to the company’s efforts to continue to prey on elderly investors is the result of a multi-state collaboration by members of the North American Securities Administrators Association (NASAA), of which Watson’s office is a member, and the Commodity Futures Trading Commission’s Office of Cooperative Enforcement.

Metals.com and its agents have attempted to evade previous regulatory actions from 12 states by, among other tactics, changing its business name. 

Watson said that if you suspect you have been targeted by similar precious metals investment schemes, contact his Securities Division at 601-359-1334.

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