SEC, CFTC and 27 States Sue L.A.-Based Precious Metals Dealer for Fraud

Last year, Weinberg Wheeler Hudgins Gunn & Dial (my firm) and Silver Law Group initiated arbitrations on behalf of numerous retirees that lost millions of dollars in a trust scam perpetrated by Safeguard Metals. The scam involved convincing retirees to invest in numismatic and semi-numismatic precious metals through an account managed by Safeguard Metals. The retirees were not told that the markups on the metals were, in some instances, 100% or more above market. Meanwhile, Safeguard Metals promised to protect client assets. After the initial fraudulent sale, the independent IRA custodian affiliated with Safeguard Metals would issue statements based on the unconfirmed account values -- provided by Safeguard -- with grossly inflated account values. Because the account statements contained inflated account values, the fraud went undetected for years in some cases.

Yesterday, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and 27 States filed two actions against Safeguard Metals and its owner, Jeffrey Santulan, for fraud, among many other things. The filings are available here:

https://www.cftc.gov/PressRoom/PressReleases/8489-22

https://www.sec.gov/litigation/complaints/2022/comp-pr2022-17.pdf

We are relieved that the Government has taken decisive action to end this fraud and protect retirees. We need more action like this at every level of law enforcement. Fraud, and particularly elder fraud, is rampant in the relatively unregulated field of precious metals investing.

About the author:?Aaron Cohn is a partner with the law firm Weinberg Wheeler Hudgins Gunn & Dial. His practice focuses on investment fraud and commercial disputes, including securities fraud, leveraged precious metals disputes, cryptocurrency scams, and business loan disputes (often involving personal guarantees).?Recently, Mr. Cohn has filed cases against (1) precious metals brokers and “leasors” for fraud, (2) several hedge funds for fraud in connection with collapsed investment funds, (3) several officers, directors and closely held companies for diverting funds and misrepresenting the company’s business model, among other things, and (4) lawyers for orchestrating investment fraud schemes.?In addition, he has filed several whistleblower complaints and actively works with regulators and law enforcement on several of his cases.?Mr. Cohn may be contacted at [email protected] or (305) 455-9133.