Nashville – The Tennessee Attorney General’s Office and the Tennessee Department of Commerce and Insurance (TDCI) are participating in a consolidated enforcement action to stop a fraudulent precious metals scheme that resulted in solicitations exceeding $68 million from ‘at least 450 investors nationwide.
The Tennessee Attorney General’s Office – on behalf of TDCI – has joined the United States Commodity Futures Trading Commission (CFTC) and 26 other state securities regulators in filing a complaint with the court. of the United States District for the Central District of California alleging Safeguard Metals, LLC and Jeffrey Santulan, aka Jeffrey Hill, solicited investors nationwide by touting precious metals at grossly inflated prices that did not been disclosed.
In this case, investors were advised to liquidate their holdings in registered investment companies to fund investments in precious metals, bullion and bullion coins through self-directed Individual Retirement Accounts. Self-directed IRAs should not be confused with traditional IRAs or other retirement vehicles.
Defendants are accused of failing to disclose mark-up fees for their precious metals investment products and that investors could lose most of their funds once the transaction is completed. In many cases, the market value of precious metals sold to investors was significantly lower than the value of securities and other retirement savings that investors had liquidated to fund their purchase.
In Tennessee, nine investors were defrauded $2,123,014.70 in the execution of this national plan. Lots of Tennessee investors liquidated their existing retirement accounts, which contained securities, to obtain funds to buy the metals.
“Don’t fall into the trap. This is another national program that is causing many people, especially our seniors, to lose their retirement funds,” said Tennessee Attorney General Herbert H. Slatery III. “Our office will do whatever is necessary to enforce our securities laws and return funds like these to victims.”
“This is one of many large-scale precious metals investment programs that we have been working to shut down since the start of the pandemic and we are investigating many other metals investment companies. precious metals on similar allegations. To avoid further harm, investors are advised to be particularly careful when purchasing precious metals and to check for outrageously high commissions, spreads or mark-ups of up to 30-70%” , said Elizabeth Bowling, TDCI’s assistant commissioner for the securities division. “As the market continues to fluctuate, we expect to see more fraudsters capitalizing on investor uncertainty and using fear to manipulate the right people with their hard-earned money.”
“Pending further precious metals investment programs, investors are advised to verify registration of all investment products and professionals, research investments diligently, ask difficult questions about fees, mark-ups or spreads, risks and potential returns,” said Director of the Securities Division Financial Services Investigation Unit Michelle Stone. “If the answers sound too good to be true, or don’t make sense, protect your wallet by walking away.”
To avoid further loss, investors are advised to:
- Exercise caution when buying precious metals and check for outrageously high commissions, spreads or markups of up to 30-70%.
- Check registration of all investment products and professionals, diligently research investments, ask tough questions about fees, mark-ups or spreads, risks and potential returns.
The Tennessee Attorney General’s Office encourages investors who suspect they may have been targeted to contact the Financial Services Investigations/Enforcement Section of the Securities Division at (615) 741-5900.
#22-03: TN Attorney General, Commerce and Insurance Joins CFTC in Ending $68 Million Precious Metals Program