State Court Litigation

Boca Raton, Florida Precious Metals Fraud Lawyer, Russell L. Forkey, Esq.

A current area of state court litigation, in what may be considered a commodity, is the precious metals business, primarily in the areas of buying and selling gold, silver and platinum, utilizing leverage.

Presently, precious metals firms involved in this type of business are not regulated by any governmental agencies.  Many of these companies, especially in the South Florida area, have used high pressure sales tactics supplemented with false and fraudulent information to induce customers to "invest" with them.  However, this has turned into nothing more than a "license to steal."

For a general discussion as to how this scam works please follow these two links, labeled script and precious metals fraud.

While many of the agreements that are entered between a customer and a precious metals or its alleged clearing firm contain an arbitration clause, many times the language of the agreement only requires arbitration between the customer and the firm.  How then do you go after the individuals that set up or participated in the scam?  You have to file a state court action.

In the state court action, there are various claims that can be made, which focus on the fraudulent conduct of the defendants.  This would include the individuals that set up the precious metals company, its officers and directors, its supervisors and the sales person that directly dealt with the customer.

 Without filing a state court action, more likely than not, you would not be able to get jurisdiction over the individuals that benefited most from the fraudulent conduct.

When served with the complaint, the defendants have two choices.  First, they can elect to defend the state court action.  Secondly, they could elect to file a motion to compel arbitration of all of the claims made, assuming that the claims fall within the purview of the arbitration agreement.  In either circumstance, the customer gets jurisdiction over the fraudsters so that the ultimate judgment can be enforced against the wrongdoers

The typical types of claims that can be made against the fraudsters are fraud and deceit, negligent misrepresentation, negligent supervision and possibly claims under various statutes in the respective state where you live.  However, this determination can only be made after consultation with experienced counsel. 

Please keep in mind, as with all fraudulent activity, the faster you try to recover your investment losses, the higher the probability of success.  The necessity of seeking immediate redress is enhanced by the fact that the Commodity Futures Trading Commission is conducting hearing mandated by the Dodd Frank legislation adopted last year by Congress, which would regulate precious metals firms.  This should automatically put many of these firms out of business, which means you will have to chase the fraudsters to try and recover your losses.