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SACRAMENTO –The California Division of Monetary Safety and Innovation (DFPI) immediately introduced that, in partnership with the U.S. Commodity Futures Buying and selling Fee (CFTC) and 29 different state regulators, the events have reached a settlement with treasured metals vendor Safeguard Metals, LLC and Jeffrey Ikahn in a federal lawsuit filed in February 2022, in america District Court docket for the Central District of California. The lawsuit alleged that Safeguard and Ikahn engaged in a $68 million fraudulent scheme that focused the aged.
A key discovering within the Consent Order is that between October 2017 and July 2021, Safeguard and Ikahn deceived greater than 450 clients nationwide into buying treasured metals by way of false and deceptive statements, together with misrepresenting Safeguard’s and Ikahn’s credentials and the danger and security of buyer investments in conventional retirement accounts.
“Safeguard Metals engaged in fraudulent and misleading practices to solicit hundreds of thousands of {dollars} primarily from aged and retirement-aged people for revenue. In consequence, clients suffered substantial losses on their retirement investments,” mentioned DFPI Commissioner Clothilde V. Hewlett. “By becoming a member of this settlement, in partnership with the CFTC and different state regulators, DFPI continues its efforts to guard customers by holding dangerous actors within the treasured metals business accountable for his or her actions.”
The order additionally finds that the defendants charged a median markup of 51 to 71 % on the valuable metals, which was considerably greater than the quantities the defendants represented in Safeguard Metals’ buyer agreements as “working margins” of 23 to 42 %. Safeguard Metals steered over 97 % of its gross sales from largely inexperienced traders into overpriced silver cash which had considerably greater markups than gold cash and generated roughly $66 million for Safeguard.
The defendants consent to using the consent order’s findings and conclusions on this motion and any subsequent actions between the events, however in any other case, neither admit nor deny the findings.
As a part of the courtroom authorised settlement, Safeguard and Ikahn agreed to a everlasting injunction that enjoins them from violating a number of federal and state legal guidelines together with legal guidelines that prohibit commodities fraud, securities and funding adviser fraud, and offering unlicensed funding recommendation.
As well as, Ikahn agreed to an order barring him from any place of employment, administration, or management of any funding adviser, broker-dealer, or commodity adviser in California. Additional he agreed to orders barring him from the securities business in different states, and to a federal commodity buying and selling ban. Within the subsequent part of the litigation, the suitable quantity of buyer restitution and civil financial penalties will likely be decided.
Safeguard and Ikahn additionally agreed to settle a federal lawsuit filed by the Securities and Change Fee (SEC) alleging violations of federal Securities Legal guidelines. The DFPI needs to thank the CFTC, different state regulators, and the SEC for his or her help on this motion.
The DFPI encourages customers who’ve skilled fraudulent practices in reference to funding advisory providers or the sale of commodities, and any unfair, illegal, misleading, and abusive practices from a monetary service supplier to submit a grievance with the Division on-line: dfpi.ca.gov/submit-a-complaint.
Concerning the DFPI
The California Division of Monetary Safety and Innovation (DFPI) protects customers, regulates monetary providers, and fosters accountable innovation. The DFPI protects customers by establishing and implementing monetary laws that promote transparency and accountability. We empower all Californians to entry a good and equitable monetary market by way of schooling and stopping potential dangers, fraud, and abuse. Be taught extra at dfpi.ca.gov.
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