The Commodity Futures Trading Commission (CFTC) has reached a settlement with Safeguard Metals, LLC and its owner, in a combined effort by 29 state actors. This includes the Maryland Attorney General’s Office and other state regulators. The resolution of the settlement comes after accusations were made that the precious metals dealer violated the Commodity Exchange Act, as well as several state laws, in an alleged $68 million investment scheme.
The scheme was reportedly honed toward the retirement accounts of elderly individuals and hence, took a considerable toll on vulnerable people’s financial security, as stated by JD Supra.
The violations include misleading advertising and phone sales tactics, which purported to promise customers significantly inflated returns on investments in precious metals. This conduct is alleged to have led to mass invasions into personal retirement accounts of individuals, under false pretences.
The settlement results in a cease and desist order slapped against the company and its owner, and a ban from any and all activities relating to commodity interest transactions. Additionally, it demands the restitution of funds to aggrieved parties and commands a considerable civil monetary fine.
With the objective of preventing such future schemes, corporation and law firm personnels should invest resources in strengthening enforcement mechanisms, enhanced regulations, and increased oversight into the precious metals market.
It is yet another stark reminder of the importance of maintaining robust and exhaustively stringent checks on statistics and claims made by investment businesses to ensure the protection of not just one’s individual clients but also the overall financial market integrity.