American Precious Metals, LLC. and Harry Tanner et. al.
Circuit Court of Broward County, Florida:
American Precious Metals, LLC., Harry Tanner, Jr., Andrea Tanner, and Lea Lauren a/k/a Lea Nehme (located in Broward County, Florida) Precious Metals Fraud - leveraged accounts
An elderly husband and wife recently filed a law suit in the Broward County, Florida circuit court for fraud and negligence misrepresentation in the inducement of their business relationship with two South Florida precious metals firms. In their complaint, the plaintiffs generally allege that they were fraudulently or negligently induced, through misleading high-pressure sales tactics, to enter into a client - broker relationship with these companies. They further allege that in approximately 3 weeks time, the plaintiffs' account was traded in an unsuitable, fraudulent and reckless manner, which caused the plaintiffs damages of approximately $105,000. As fate would have it, the loss that the plaintiffs suffered equaled the amount of administrative fees, interest and undisclosed mark-ups and mark-downs charged by the corporate defendants. The background of all of the individual defendants, in the case, was in commodity futures.
As it relates to certain of the named individual defendants, it is alleged in the complaint that:
1. On September 27, 2006, a hearing panel of the National Futures Association, issued a decision in the matter of Mizner Financial Trading Corp., Bentley Trading Group, Inc., Terranova Financial Trading Corp., and Harry Tanner, Jr., NFA Case no. 05-BCC-007, which expelled the Defendant, Harry Tanner, Jr., from association with any National Futures Association member and fined him, jointly and severally, with the other named respondents $100,000.
2. The Defendant, Harry Tanner, Jr., was the principal of Mizner Financial Trading Corp., and the president of Bentley Trading Group, Inc., and Terranova Financial Trading Corp., with compliance responsibilities over all associated persons. The hearing panel, after considering testimony from numerous witnesses, including the Defendant, Harry Tanner, Jr., determined that "the evidence overwhelmingly showed that Bentley, Terranova and Mizner APs [associated persons] used misleading sales solicitations to defraud the public and that Tanner did nothing to stop them."
3. On June 22, 2007, the Defendants, Harry Tanner, Jr. and Andrea Tanner, filed the articles of organization for the Defendant, American Precious Metals, LLC., which they set up based upon the same business model of Mizner Financial Trading Corp., and Terranova Financial Trading Group, which were based upon high pressure sales practices and providing clients with misleading and false representations concerning, among other things, profitability and risk relating to leverage purchases and sales of precious metals.
4. At all times relevant and material hereto, the Defendant, Lea Lauren a/k/a Lea Nehme, was an agent, employee and sales representative for the Defendant, American Precious Metals, LLC. At all time associated herewith, she did business out of the Defendant, American Precious Metals, LLC's, office in Broward County, Florida.
5. On July 12, 2007, the United States District Court for the Southern District of Florida, in the case of Commodity Futures Trading Commission v. Madison Forex International, LLC, Chadwick Grayson Bauer & Co., Inc., Qualified Leverage Providers, Inc., John Peter D'Onofrio, Christopher Peck, Gary Baugh and Lea Lauren, Case No.: 05061672, entered a Consent Order of Permanent Injunction and Equitable Relief against, among others, Lea Lauren.
6. In this judgment, the Defendant, Lea Lauren a/k/a Lea Nehme, was permanently restrained, enjoined and prohibited from directly or indirectly:
Cheating or defrauding or attempting to cheat or defraud any other person, or deceiving or attempting to deceive any other person by any means whatsoever in connection with an offer to enter into, the entry of or confirmation of the execution of, any commodity option contract, in violation of Section 4c(b) of the Act, 7 U.S.C. § 6c(b) (2002) and Regulation 32.9 (a) and (c), 17 C.F.R.§ 32.9 (a) and (c) (2006); including but not limited to, making sales solicitations to customers that:
i. misrepresent the likelihood of profit from trading foreign currency options contracts;
ii. omit, downplay, or misrepresent the risk of loss in trading foreign currency options contracts;
iii. omit the actual track record of the broker or firm; and
v. omit any material fact necessary to make other facts disclosed not misleading.
Because of a motion to compel arbitration filed by all of the defendants and a court order thereon, this matter is now pending before the American Arbitration Association.
Subsequent to the time that this matter was compelled to arbitration, the Federal Trade Commission filed an action against certain of the respondents named in arbitration. In the FTC action, the federal district court recently stayed any further proceedings against American Precious Metals, its officers, directors and employees until the conclusion of the receivership.
The FTC matter is nearing its end. Once this matter is concluded against the named parties, the subject matter will be reactivated.