The accessibility of precious metals, however, makes them an easy vessel for would-be scammers and fraudulent brokers to take advantage of unseasoned investors. In many cases, alertness and skepticism can mean the difference between making a solid investment and making a stolen investment.

If a prospective broker attempts to entice you into buying gold, silver, platinum or palladium with any of the following tactics, consider your next moves carefully.

“You can trust me.”

Reputable brokers work for reputable companies, and a company’s reputation should be easy enough to check. A shady dealer may try to convince you that their professional background or association with a specific firm, industry or organization warrants your unfailing trust alone. If a dealer offers only special credentials without other justification, their reasons for taking your investment likely are not altruistic.

“I guarantee good returns.”

The market is a living being, which means that it fluctuates almost constantly. No dealer can guarantee double or triple your initial deposit without a crystal ball.

In the same line of thinking, a broker cannot make comparisons to returns on your current investments unless you provide them with that information. Keep an eye out for “too good to be true” situations that offer returns above and beyond your present investments.

“If it worked for them, it will work for you.”

Peer pressure continues to exist outside of after-school programs. By pointing to the established success of others, a dealer may try to convince you that your investment with them will be foolproof. However, without the crystal ball, they are offering you an empty promise with no way of knowing how the market will react.

“I’ll scratch your back if you scratch mine.”

On occasion, you will encounter a dealer who offers to tie your success together in order to set your mind at ease. Reducing dealer fees may be a ploy to get you on the hook to do them a favor.

“It’s only available for a limited time/in limited quantities.”

False windows and supply create false senses of urgency. That false sense of urgency can cause you to buy before you have time to research the dealer and the investment properly. Investments, no matter how small, should be considered carefully and thoughtfully. If you miss out on this particular investment, another will present itself in time.

If you suspect that your precious metals investment has gone awry because of a fraudulent dealer, discuss your concerns with an experienced commodities and precious metals attorney.

The final judgment was based upon a unanimous jury verdict which found Willian C. Conway, Jr. and Steven Schrag, among other defendants, guilty of fraud in the inducement, negligent misrepresentation in the inducement and conspiracy to defraud. The judgment was predicated upon an alleged gold (precious metals scam) which originated in Africa.

Contact Us: With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

Securities and Exchange Commission v. Jason A Halek, Joshua D. Spivey, Patrick J. Booths and Steven J. Little, Civil Action No. 3:14-cv-01106-D (NDTX) (March 28, 2014)

SEC Charges Four Texas Residents for Selling Fradulent Oil and Gas Investments

Recently, the Securities and Exchange Commission filed suit in United States District Court in Dallas, Texas, alleging that from September 2009 to June 2010, Jason A. Halek of Southlake, Texas and Patrick J. Booths of Fort Worth fraudulently conducted unregistered securities offerings of working interests in oil and gas projects that were owned and operated by Halek’s company, Halek Energy, LLC. These projects were offered to investors by Joshua D. Spivey of Morristown, Tennessee and Steven J. Little of Southlake, Texas, through their separately incorporated companies. Through this alleged scheme, Halek and the other defendants sold more than $5.5 million in Halek Energy oil and gas working interests to more than 100 investors nationwide.

The Commission’s complaint alleges that the investments were offered and sold to investors through separately incorporated companies owned and operated by Spivey, Little and a third individual. The Commission contends that these individuals and companies were merely “straw men” who sold and promoted investments in new Halek Energy oil and gas projects. Booths was Halek Energy’s Vice President of Sales and Marketing and served as Halek’s point man on the alleged scheme. Booths helped Halek recruit the straw men and assisted in facilitating their sale and promotion of Halek Energy projects through their companies.

According to the complaint, offering documents given to investors falsely claimed that the straw men companies owned the oil and gas projects. In fact, none of the companies owned any part of the projects. Rather, the projects were established and owned by Halek Energy and controlled by Halek and Booths. Spivey and Little each received large commissions or other compensation from promoting and selling the working interests for Halek and Halek Energy. Booths was also well compensated for his role in the alleged scheme.

The complaint alleges that Halek conceived of the straw men scheme after the Commission began investigating his involvement in an earlier scheme to make fraudulent oil-and-gas securities offerings. As a result of that earlier scheme, the Commission sued Halek and Halek Energy in August 2010. Lit. Rel. No. 21637. The Commission contends that Halek intended the straw men scheme as a means for avoiding the Commission’s scrutiny.

The Commission charges Halek and Booths with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”) and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. In addition, the Commission charges Joshua Spivey and Steven Little with violating Sections 5(a), 5(c), 17(a)(2) and 17a(3) of the Securities Act and Section 15(a) of the Exchange Act. Without admitting or denying the allegations in the complaint, defendants Booths, Spivey, and Little have agreed to injunctions against violations of these provisions, and to follow-on administrative bars that would bar them from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, or from participating in any offering of a penny stock. The Commission is seeking civil penalties and disgorgement with prejudgment interest against each defendant.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

On December 14, 2011, the Commodity Futures Trading Commission (“Commission”) issued in the Federal Register an interpretation regarding the meaning of the term “actual delivery,” as set forth in the Commodity Exchange Act. Recently, the Commission determined to clarify its interpretation, which is reflected in the attached link.

This interpretation is important from the prospective of both sellers and buyers of precious metals using leverage. From a sellers standpoint, failure to comply with the actual delivery provisions, discussed in the interpretation could led to adverse consequences from an enforcement action brought by the Commission or in a civil action brought by a purchaser. CFTC Interpretive Release – Actual Delivery

Please keep in mind that this information is being provided for informational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this post, you should consult with a qualified professional.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities, commodities and precious metals law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

The Manhattan District Attorney’s Office recently announced that three Florida men who operated an investment scheme through a precious metals company have been indicted in New York City on charges they defrauded scores of investors out of millions of dollars.

Manhattan District Attorney Cyrus Vance said Tuesday Sean Robert Stropp, Karl Spicer, Ricardo Garcia and PMCO Services Inc. were charged with grand larceny and violation of the Martin Act among other charges.

He says the three men pretended to work on Wall Street, in all obtaining about $8 million from 150 investors to buy metals like silver bullion and steering them to risky transactions.

Garcia pleaded not guilty and was held on $150,000 bond; the corporation defendant also pleaded not guilty. Stropp and Spicer have not been arraigned.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities, commodities and precious metals law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

On June 28, 2013, the Commission charged Matthew Madison and Dwight McGhee, and their Irving, Texas based company Infinity Exploration, LLC, with conducting a fraudulent offering of oil and gas related investments. The Commission’s complaint alleges that, between March and October 2008, Madison and McGhee raised over $2 million from at least 40 investors from the fraudulent offer and sale of interests in Infinity’s two oil and gas joint ventures. Infinity’s offering materials misled investors into believing that Infinity’s ventures would own the leases and control drilling operations. Indeed, Infinity’s communications with investors were peppered with references to as “our wells” and “our crew.” In reality, Infinity’s ventures did not have direct interests in any oil and gas leases and no direct involvement in operation of any leases. The complaint alleges that Madison and McGhee concealed this fact from investors. The complaint further alleges that the defendants’ offering materials falsely described Madison as experienced and successful in the oil and gas industry and failed to disclose McGhee’s 2007 federal felony conviction.

The complaint alleges that Infinity, Madison, McGhee violated Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest and civil penalties against each of the defendants. [SEC v. Infinity Exploration, et al., Civ. Action No. 3:13-cv-2499-L, USDC, NDTX (Dallas Division, June 28, 2013)].

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

A Numismatic Coin is a coin that is valued based on its rarity, age, the quantity originally produced, and condition. These coins are bought and sold as individual items within the coin collecting community. Most Numismatic Coins are legal tender coins that were produced in limited quantities to give them scarcity value. They are historic coins which also can be rare. The current price of gold is a minor factor when dealing with Numismatic Coins. Premiums are traditionally far higher than those of Bullion Coins, and values fluctuate to a much wider extent. For example a $5 gold piece may may contain $70 dollars of gold but may sell for as much as $700. The minimum amount recovered from Numismatic Coin investments is always either its face value or its metal content.

With the above in mind, anyone considering investing in Numismatic Coins should think twice, especially if the investor is dealing with a firm located in another city or state. In our opinion, Numismatic Coins should never be purchased with anything other than absolute risk funds.

Please keep in mind that this information is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If you have any questions conerning this post, the reader should contact a qualified professional.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

The U.S. Commodity Futures Trading Commission (CFTC) recently issued an Order filing and settling charges against two Boca Raton, Fla., companies, Joseph Glenn Commodities LLC (Joseph Glenn) and JGCF LLC (JGCF), and their sole owners and principals, Scott Newcom and Anthony Pulieri (the Respondents) for engaging in illegal, fraudulent off-exchange financed transactions in precious metals with retail customers.

The CFTC Order, filed on March 27, 2013, requires Joseph Glenn, JGCF, Newcom, and Pulieri to pay approximately $635,000 in restitution to customers for their losses and to return approximately $330,000 remaining in customers’ accounts. The Order requires Pulieri to pay a civil monetary penalty of $100,000. The Order also permanently prohibits the Respondents from registering with the CFTC and imposes a five-year trading ban on trading for others. In addition, the Order prohibits the Respondents from violating the Commodity Exchange Act, as charged, and requires them to comply with certain undertakings, including fully and expeditiously cooperating with the CFTC.

The Illegal and Fraudulent Transactions

The CFTC Order finds that from July 2011 through June 2012, the Respondents solicited retail customers, generally by telephone or through Joseph Glenn’s website, to buy physical precious metals such as gold, silver, copper, platinum, or palladium in what are known as off-exchange leverage transactions. According to the Order, the customers paid the Respondents a portion of the purchase price for the metals, and Joseph Glenn and JGCF purportedly financed the remainder of the purchase price, while charging the customers interest on the amount they purportedly loaned to customers.

The CFTC Order states that such financed off-exchange transactions with retail customers have been illegal since July 16, 2011, when certain amendments of the Dodd-Frank Wall Street and Consumer Protection Act of 2010 (Dodd-Frank Act) became effective. As explained in the Order, financed transactions in commodities with retail customers like those engaged in by the Respondents must be executed on, or subject to, the rules of an exchange approved by the CFTC. Since the Respondents’ transactions were done off-exchange with retail customers, they were illegal.

Furthermore, the CFTC Order states that when Joseph Glenn and JGCF engaged in these illegal transactions they were acting as dealers for a metals merchant called Hunter Wise Commodities, LLC (Hunter Wise), which the CFTC charged with fraud and other violations in federal court in Florida on December 5, 2012 (see CFTC Press Release 6447-12). Hunter Wise was purportedly Joseph Glenn’s and JGCF’s source for the metal and the loans. As alleged in the CFTC Complaint against Hunter Wise and according to the CFTC Order in this case, however, neither Joseph Glenn, JGCF, nor Hunter Wise purchased or held metal on the customers’ behalf, or disbursed any funds to finance the remaining balance of the purchase price. The Order finds that the Respondents’ customers thus never owned, possessed, or received title to the physical commodities that they believed they purchased.

The Order also finds that the Respondents defrauded their customers by misrepresenting the profitability of the financed off-exchange transactions and failing to disclose associated commissions, service, and interest fees.

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With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

CFTC Charges Hunter Wise Commodities, Lloyds Commodities, C.D. Hopkins Financial, United States Capital Trust, Newbridge Alliance, Blackstone Metals Group, and their Principals in Multi-Million Dollar Fraudulent Precious Metals Scheme

CFTC alleges that defendants conducted illegal, off-exchange commodity transactions, and deceived customers in connection with financed transactions in precious metals

The U.S. Commodity Futures Trading Commission (CFTC) recently announced that on December 5, 2012, it filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Hunter Wise Commodities, LLC; Hunter Wise Services, LLC; Hunter Wise Credit, LLC; Hunter Wise Trading, LLC; Lloyds Commodities, LLC; Lloyds Commodities Credit Company, LLC; Lloyds Services, LLC; C.D. Hopkins Financial, LLC; Hard Asset Lending Group, LLC; Blackstone Metals Group, LLC; Newbridge Alliance, Inc.; United States Capital Trust, LLC; Harold Edward Martin, Jr.; Fred Jager; James Burbage; Frank Gaudino; Baris Keser; Chadewick Hopkins; John King; and David A. Moore. The complaint charges these entities and individuals with fraudulently marketing illegal, off-exchange retail commodity contracts. The complaint alleges that Hunter Wise Commodities, the orchestrator of the fraud, has taken in at least $46 million in customer funds since July 2011.

According to the CFTC complaint, the defendants claim to sell physical metals, including gold, silver, platinum, palladium, and copper, to retail customers in retail commodity transactions. Under the defendants’ retail commodity transactions investment contract, customers allegedly make a down payment on certain quantities of physical metals, usually 25 percent of the total purchase price. Defendants allegedly claim to arrange loans for the balance of the purchase price, and advise customers that their physical metals will be stored in a secure depository.

The complaint further alleges that these statements were false, and that the defendants do not purchase any physical metals, arrange loans for their customers to purchase physical metals, or arrange for storage of physical metals for any customers participating in their retail commodity transactions. Instead, all the transactions are just paper transactions, according to the complaint. Defendants allegedly do not own or sell metals to customers; customers are charged storage and insurance fees on metals that do not exist; and are charged interest on loans, which are never made by the defendants.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) of 2010 expanded the CFTC’s jurisdiction over transactions like these, and requires that such transactions be executed on or subject to the rules of a board of trade, exchange or commodity market, according to the complaint. This new requirement took effect on July 16, 2011. The complaint alleges that all of the defendants’ financed commodity transactions after July 16, 2011, were illegal. The complaint also alleges that the defendants defrauded customers in all of these financed commodity transactions.

David Meister, the CFTC’s Director of Enforcement stated: “Here is a prime example of how the Dodd-Frank Act provided the Commission with additional strong authority to go after wrong-doers, such as, as alleged in the complaint, individuals who prey on people looking to make retail investments in commodities like gold and silver. We will use this new authority to the fullest extent possible.”

In January 2012 the CFTC issued a Consumer Fraud Advisory (see Advisory under Related Links) regarding precious metals fraud, saying that it had seen an increase in the number of companies offering customers the opportunity to buy or invest in precious metals. The CFTC’s Consumer Fraud Advisory specifically warned that frequently companies do not purchase any physical metals for the customer, instead simply keeping the customer’s funds. The Consumer Fraud Advisory further cautioned consumers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.

In its continuing litigation against the defendants, the CFTC is seeking preliminary and permanent civil injunctions in addition to other remedial relief, including restitution to customers.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

The advertisements seem too good to pass up. They tout high returns coupled with low risks from investments in foreign currency (forex) contracts. Sometimes they even offer lucrative employment opportunities in forex trading.

Do these deals sound too good to be true? Unfortunately, they are, and investors need to be on guard against these scams. They may look like a new sophisticated form of investment opportunity, but in reality they are the same old trap-financial fraud in fancy garb.

Forex trading can be legitimate for governments and large institutional investors concerned about fluctuations in international exchange rates, and it can even be appropriate for some individual investors. But the average investor should be wary when it comes to forex offers.

The Commodity Futures Trading Commission (CFTC) and the North American Securities Administrators Association (NASAA) warn that off-exchange forex trading by retail investors is at best extremely risky, and at worst, outright fraud.

Forex contracts involve the right to buy or sell a certain amount of a foreign currency at a fixed price in U.S. dollars. Profits or losses accrue as the exchange rate of that currency fluctuates on the open market. It is extremely rare that individual traders actually see the foreign currency. Instead, they typically close out their buy or sell commitments and calculate net gains or losses based on price changes in that currency relative to the dollar over time.

Forex markets are among the most active markets in the world in terms of dollar volume. The participants include large banks, multinational corporations, governments, and speculators. Individual traders comprise a very small part of this market. Because of the volatility in the price of foreign currency, losses can accrue very rapidly, wiping out an investor’s down payment in short order.

How do the scams work?

Forex scams attract customers with sophisticated-sounding offers placed in newspaper advertisements, radio promotions, or on Internet sites. Promoters often lure investors with the concept of leverage: the right to “control” a large amount of foreign currency with an initial payment representing only a fraction of the total cost. Coupled with predictions about supposedly inevitable increases in currency prices, these contracts are said to offer huge returns over a short time, with little or no downside risk.

In a typical case, investors may be assured of reaping tens of thousands of dollars in just a few weeks or months, with an initial investment of only $5,000. Often, the investor’s money is never actually placed in the market through a legitimate dealer, but simply diverted-stolen- for the personal benefit of the con artists.

Here Are Some Examples of What the Regulators Have Done:

The CFTC is the Federal agency with the primary responsibility for overseeing the commodities markets, including foreign currency trading. Many state securities regulators also have the right under their state laws to take action against illegal commodities investments. Sometimes the CFTC and the states work together on cases. Examples include:

In 2005, the CFTC and the Commissioner of Corporations of the State of California sued National Investment Consultants, Inc., and others in U.S. District Court for the Northern District of California for engaging in a forex scam involving approximately $2 million in customer funds. In 2006, the Court ordered restitution and fines amounting to $3.4 million.

Also in 2005, the CFTC and the Texas State Securities Board (TSSB) engaged in a cooperative enforcement effort against Premium Income Corp. (PIC) and its principals. The CFTC and Securities and Exchange Commission (SEC) filed an action in U.S. District Court for the Northern District of Texas and the TSSB filed an administrative action charging PIC and its principals with engaging in an illegal $11 million forex operation. To date, the federal court has found three corporate defendants liable to pay restitution of $12 million and each was assessed a fine of $37 million. The State of Texas also has obtained cease and desist orders along with various criminal indictments and convictions. PIC’s president is currently incarcerated on charges stemming from his forex scam.

In 2004, Gregory Blake Baldwin of Utah pleaded guilty to fraud after his firm, Sunstar Funding, accepted $228,500 from 33 investors for placement into the foreign currency market. The investors’ money was not placed in the foreign currency market but was used to pay some past investors and for personal expenses of Baldwin.

What are the warning signs of fraud?

If you are solicited by a company that claims to trade foreign currencies and asks you to invest funds, you should be very careful. Watch out for the following warning signs:

1. Be wary of promises that sound too good to be true: “You can make six figure profits within a year; forex investments are very low risk; You can double your money.” Get-rich-quick schemes, including those involving foreign currency trading, tend to be frauds.

2. Be skeptical about unsolicited phone calls offering investments, especially those from out-of-state salespersons or companies that are unfamiliar.

3. Be especially cautious if you have acquired a large sum of cash recently and are looking for an investment vehicle. In particular, retirees with access to their retirement funds may be attractive targets for fraudulent operators. Getting your money back once it is gone can be difficult or impossible.

4. Be wary of high-pressure efforts to convince you to send or transfer cash immediately to the firm, via overnight delivery or the Internet.

5. Be smart about the money you do put at risk. Even when purchased through the most reputable dealer, forex investments are extremely risky. If you are tempted to invest, make sure you understand these products and above all, only invest what you can afford to lose. Don’t invest your rent money in a forex contract.

Investigate before you invest

Investors should make sure that anyone offering a forex investment is properly licensed and has a reputable business history. The public can obtain information about any firm or individual registered with the CFTC, including any actions taken against a registrant, through the National Futures Association (NFA) Background Affiliation Status Information Center (BASIC), available on the NFA website at: http://www.cftc.gov/exit/index.htm?http://www.nfa.futures.org/basicnet/ .

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With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

This post is being provided for informational purposes only. The associations referenced below are not being endorsed by the writer but are solely being provided for the convenience of the reader.

The gold coin business as well as the sale of other precious metals is unregulated. However, if you do decide that you want to take a “shot” at investing in gold coins there are a few things that you can do to attempt to minimize your risk.

The first thing that should be done is to go to the consumer protection information from the American Numismatic Association about “How to Buy Gold & Silver” can be found on-line at http://www.money.org/Content/NavigationMenu/ExploretheWorldofMoney/BuyingGold/default.htm, and the Professional Numismatists Guild offers consumer education information about “Three Things Gold Buyers Must Know First” on-line at http://www.pngdealers.com/item.php?item_id=129&category_id=2 .

“If you don’t know gold coins, you’d better know your gold coin dealer,” is the advice to collectors and investors from three nonprofit organizations: the American Numismatic Association (http://www.money.org), the Industry Council for Tangible Assets (www.ictaonline.org) and the Professional Numismatists Guild (www.pngdealers.com).

“There are many reputable, professional numismatists in the United States,” the three organizations emphasize. “Before you make a purchase or offer something for sale, do your homework and check the dealer’s credentials. For example, contact the Better Business Bureau to check the company’s BBB rating or if the company is even accredited by the BBB.” A listing of Better Business Bureau accredited and rated companies nationwide can be found on-line at www.bbb.org. Other ways to check on any company that you are considering dealing with is to perform an on-line computer search on a search engine such as “Google” or utilize a system such as “PACER” or go to the local clerk of the court’s office and to a “defendant” search to see if there are any lawsuits pending against the company. With the knowledge of the existence of these on-line resources, many companies now require disputes between customers and the firm to be resolved in arbitration. The existence of such disputes are more difficult or impossible to verify because of the confidentiality of the process. Therefore, nothing is failsafe.

Typically, dealers who are unresponsive to reasonable requests from customers seeking resolution of disputes are not involved in the mainstream of numismatics, but may advertise in prominent, mainstream news media. Based on the experiences of the ANA, ICTA and PNG, and in consultation with law enforcement agencies, the three organizations suggest that buyers or sellers of gold coins who encounter problems consider taking these actions:

Make copies of all correspondence, receipts and transactions and if possible have copies of advertisements or the dates and times ads were broadcast.
Always contact the company directly to try to resolve the dispute. Ask for the manager or company owner.
Take thorough notes of your conversation(s).

If the problem is still not resolved after a reasonable amount of time, you need to take immediate action to attempt to resolve the dispute by contacting a lawyer experienced in these matters. Time is of the essence.

If the company with which you are dealing is a member of the Professional Numismatists Guild (www.PNGdealers.com ) the dealers in question must adhere to the Guild’s Code of Ethics, support the PNG Collector’s Bill of Rights and must agree to binding arbitration to resolve any disputes involving numismatic merchandise. Otherwise, if the agreement that you sign does not contain and arbitration agreement, the matter will need to be resolved in court.

Contact Us
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

As indicated in an earlier Goldline International blog, a case seeking class action certification was filed in the United States District Court for the District of South Carolina, Greenville Division styled Tim Clark; Johanna Clougherty; Michael Clougherty; on behalf of themselves and all other similarly situated v. Goldline International, Inc., case no. 6:10-Civ-01884. The basis of the complaint is set forth in an earlier blog. The alleged underlying facts do not have a bearing on the importance of the court’s ruling on Goldline International’s Motion to Dismiss or Stay Proceedings and Compel Arbitration, which was granted. What the court’s order does demonstrate are the perils and risks of not only dealing with Goldline International but how far some firms will go to protect themselves and disadvantage their customers for their alleged wrongdoing.

The first issue or importance that was discussed by the court related to arbitration. Goldline International requires its clients to “read” and sign an Account and Storage Agreement (Account Agreement), which contains an Arbitration Agreement. Paragraph K of the Account Agreement states as follows:

Client agrees to arbitrate all controversies between client and Goldline including any of Goldline’s current or former officers, directors, employees, or agents arising out of or relating in any way to any transaction with Goldline, client’s account, any account that client causes to be opened in the future, or any service provided by Goldline, including but not limited to transactions of any kind made on client’s behalf. This Arbitration Agreement includes the determination of the scope or applicability of this agreement to arbitrate.

The parties agree that any arbitration will be administered by JAMS under its Comprehensive Arbitration Rules and Procedures, when the amount in controversy is greater than $250,000 and JAMS’s Streamlined Arbitration Rules when the amount in controversy is less than or equal to $250,000. The arbitration proceedings shall be kept in strictest confidence. The parties agree the exclusive venue for arbitration proceedings, including any arbitration hearing, will be Santa Monica, California. The parties further agree to the personal jurisdiction of the Superior Court, Los Angeles County, State of California, to enforce these arbitration provisions described in this Agreement. Client makes this arbitration agreement on his or her behalf and on behalf of client’s heirs, administrators, executors, successors and assigns and all persons claiming a beneficial interest in Client’s account.

The court, in ruling on Goldline International’s Motion to Compel Arbitration, determined that the Arbitration Agreement referenced above was enforceable. Consequently, any claim by a customer of Goldline International, no matter where the customer resides, must be heard, by arbitration, in Santa Monica, California. The expense and inconvenience associated with this provision is obvious.

The second issue that was discussed, by the court, was that the contractual provision requiring JAMS as the exclusive arbitration forum as determined by Goldline International was acceptable. This determination obviously prevented the customer from choosing more well known dispute resolution companies such as the American Arbitration Association.

Next, the court alluded to an argument made by the Plaintiffs that other provisions contained within the Arbitration Agreement were one sided because the limitations of remedies section limits Goldline International’s “liability in all claims” to the “amount actually paid by the client for the items in dispute less the items’ fair market value.” The Arbitration Agreement also requires that customers waive their rights in advance to claims for “indirect, incidental,k additional, punitive, exemplary or consequential damages even if Goldline has been advised of the possibility of such damages.”

Finally, the court noted that Section K-5 of the Arbitration Agreement, which requires that the client agree that any claim, arbitration, lawsuit, legal action, dispute or proceeding of any kind arising out of or relating to any transaction between client and Goldline is barred unless commenced within one year from the date of the transaction, is not unconscionable under California law.

The reader can draw his or her own conclusion as to whether or not they wish to do business with firms whose agreements are so one sided.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Centeral Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

California based, Goldline International, Inc. was recently accused of deceptive sales practices in a lawsuit filed in the United States District Court of South Carolina, Greenville Division. More specifically, the plaintiffs charged Goldline International with violating the Racketeer Influenced and Corrupt Organizations Act (RICO) and for the use of unfair and deceptive trade practices and unjust enrichment.

According to the complaint, the plaintiffs took the action to recover for the economic loss suffered by the plaintiffs as a result of Goldline’s systematic scheme to fraudulently induce market-wary consumers into purchasing numismatic coins and bullion at grossly inflated prices.

As indicated in the complaint, Goldline grossly overcharges its customers for numismatic coins and bullion. According to a recent Congressional study, the average Goldline markup was 90% above the melt value of the coin, and the largest markup on a coin was 208% above the melt value. Moreover, it is alleged that Goldline and its spokespeople “represent that purchasing Goldline products is a good investment by portraying them as a hedge against the declining value of the U.S. dollar. However, using this premise to charge an inflated price is fraudulent and deceptive for several reasons. First the investor is not getting a true hedge because the value of the dollars she/he spends is decreased at the root of the transaction by grossly overpaying for numismatic coins and bullion, which undermines the reason the investor enters the transaction in the first place. Second, the numismatic coins (collector coins) Goldline pushes hardest have the least melt value, and having precious metals with a high melt value is the entire premise of hedging against the value of the U.S. dollar according to Goldline. But at every stage of the marketing and sales process, Goldline employees and its spokespeople uniformly represent to the consumers that they cannot lose on these investments.”

To fully understand how Goldline markets its products and the fees and charges that the investor is exposed to, you can review a copy of the complaint contained within this post.

In response to the complaint, Goldline filed a Motion to Stay Deadlines, Entry of Scheduling Order, and any Obligation to Answer or Otherwise Respond Pursuant to Federal Rule of Civil Procedure 12(a) and (b) to the Complaint Pending Resolution of Motions to Compel Arbitration. A copy of this motion is also included within this post. However, the order that was entered by the court, on the motion, deserves its own post, which must be read if the reader is contemplating taking action against Goldline.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, was well as foreign individuals that invested with U.S. banks or brokerage firms.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Centeral Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

Attachments:
GoldlineInternationComplaint.pdf
MotiontoCompelArbitration.pdf

As an example of precious metals fraud, the reader need look no further then what recently happened to a California gold dealer, Superior Gold Group LLC, which was seized and whose assets were frozen by a court order.

Recently, a California judge froze the assets of Superior Gold Group LLC of 100 Wilshire Boulevard, as well as another office in Woodland Hills, after it was accused of fraudulent business practices in a civil lawsuit filed against the company and owner Bruce Sands by the Los Angeles County district attorney and the Santa Monica city attorney.

Superior Gold Group, which sold gold coins and bullion and other precious metals, is alleged to have taken payments from customers but never delivered the gold ordered, charged prices much higher than fair market value and misled customers into buying expensive specialty coins according to the lawsuit. In their lawsuit, the agencies said Superior Gold took advantage of investors who flocked to gold as the price of the precious metal rose and the value of many other investments fell in recent years. “By fostering fear and confusion among its customers, Superior has induced them to pay far above market prices for various gold products,” the complaint said.

In a report by The LA Times, they recounted one victims story…” Steven Siry, 61, of Los Angeles is one customer who believes he was ripped off. Siry said he invested $20,000 in a “gold IRA” through Superior Gold. But company representatives sold him collector’s coins at an inflated rate rather than offering him bullion, and it took more than a year and numerous phone calls before the coins were delivered to the trust company that was to hold them, he said. Siry estimates the actual value of the gold, when it finally arrived, as a little more than half of what he paid for it. “It was a big mess, it was uncomfortable, and I felt kind of stupid, quite frankly, because I didn’t do enough shopping before I used them,” he said.

In another complaint the victim stated: “Nearly two years ago (Mar. ‘09), I purchased approx. $47, 000 worth of gold and silver coins (my entire life savings). I have yet to receive (sic) a single coin! I have been calling for years and they refuse to give me my money back or to buy my coins.”

“Receiver Dean Pucci of the law firm Jones & Mayer took control of Superior Gold’s two locations in Woodland Hills and Santa Monica, Monday afternoon,” Santa Monica officials said.” Pucci was ordered by the court to secure the assets of the business and take over its operation. The court set a hearing for December 17, 2010 to decide whether the receivership and asset freeze will remain in place until the case goes to trial.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

As a reminder of the risks associated with commodities and precious metals trading, please read the below litigation summary, which relates to the case of Securities and Exchange Commission v. Clifton K. Oram, et al., Case No. 2:10-CV-01173-DB (D. Utah). This real life example demonstrates how far unscrupulous individuals will go to separate investors from their money.

The Securities and Exchange Commission’s (“Commission”) complaint alleges that Clifton K. Oram, Don C. Winkler and William R. Michael engaged in fraud by offering and selling investments in a foreign currency exchange trading (“Forex”) program issued by a Mexican entity known as MexGroup or MexBank.

The Commission’s complaint alleges that since at least 2007, Oram, Winkler and Michael collectively raised tens of millions from investors nationwide for MexGroup’s Forex trading program. The defendants attracted investors by, among other things, touting impressive monthly returns posted on MexGroup’s web site. In early December 2008, however, investors learned that their accounts were virtually wiped out in the previous month. MexGroup gave a number of explanations, eventually blaming allegedly illegal conduct by a Swiss Forex trading firm through which it executed trades.

The Complaint further alleges that beyond the fact that none of the defendants understood how the Forex market or Forex trading functioned, neither Oram, Winker or Michael took any significant steps to investigate MexGroup, its principals, or the viability of the investment. Instead, they blindly accepted MexGroup’s representations about its background, veracity, and track record. Further, Michael and his company used MexGroup’s purported performance numbers on his company’s website and made misleading representations and omissions regarding their own Forex trading experience. Even more egregious, Winkler and Oram continued to offer and sell the MBFX offering even after the November 2008 collapse.

In its complaint, the Commission alleges that the defendants violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Commission is seeking permanent injunctions, disgorgement with prejudgment interest and civil penalties against all three defendants.

This action arose from a joint SEC cooperative enforcement investigation with the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS) and the U.S. Commodities Futures Trading Commission (CFTC). Notably, on November 30, 2010, the CFTC filed a complementary action in the U.S. District Court for the District of Utah, entitled CFTC v. MXBK Group S.A. de C.V., which alleges violations of U.S. federal commodities laws by MXBK and MBFX, associated entities of MexGroup.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

WASHINGTON (October 20, 2010) – With gold prices reaching record highs, investors are increasingly turning to gold-related investments. The North American Securities Administrators Association (NASAA) today reminded investors to be cautious about jumping onto the gold bandwagon.

“The soaring price of gold has sparked a modern-day gold rush among investors eager to recover stock market losses. But it’s still a Wild West out there and dangers abound for prospective gold investors,” said David Massey, NASAA President and North Carolina Deputy Securities Administrator.

State and provincial securities regulators have issued an alert to help investors spot the risks of gold investments.

“It is a myth to say that gold is a safe investment. An investment in gold is not foolproof,” Massey said. “An investor needs to know his or her investment objectives. Gold may not provide long-term investment returns. Gold is a commodity, and, like other commodities, its price can fluctuate dramatically.”

Historically speaking, the value of gold-related investments fluctuates even more than the stock market. Gold often moves in reverse of stocks and bonds, so when stocks are down, gold may seem like a very tempting investment.

There are many ways to invest in gold, including buying actual gold or making gold-related market investments in mutual funds, exchange-traded funds and futures, as well as shares of gold mining companies. NASAA’s investor alert examines each of these options and explains what investors need to know about each before deciding to invest.

NASAA also advises investors to beware of gold investment scams. For example, in one typical scheme, a seller offers to sell actual gold bullion and then retain the investor’s gold in a “secure” vault with a promise to sell the gold for the investor as it gains in value. In many instances, the gold does not exist. In another typical scenario, a company encourages investors to cash out of their poor-performing investments to purchase gold, which may be nothing more than “fool’s gold.”

“Remember, if you are advised to cash out investments and roll funds into a different type of investment, make sure the person advising this is licensed by your state securities regulator,” Massey said.

Contact Us

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

Four men at a now-defunct South Florida precious metal company have been charged with stealing up to $1.3 million from investors who wanted to capitalize on the rising prices of gold and silver. The president of The Bullion Trading Group and three company brokers face mail fraud charges, accused by federal prosecutors of diverting clients’ funds for their personal use. The business had offices in West Palm Beach and Stuart, soliciting customers across the country from March 2008 to March 2009, court records show.

The head of The Bullion Trading Group – Christopher A. Kertatos, 40, of Orlando – and the brokers, Richard Eugene Engel, Robert Mitchael Henry and Richard Lutz, have pleaded not guilty to the charges and are to be tried at the Fort Pierce federal courthouse. All four are now free on bond.

Within the past three years, South Florida has seen a proliferation of precious metals firms offering investors a chance to buy actual gold and silver rather than trading the metals on paper. Court rulings since 2004 have placed such companies outside the reach of the Commodity Futures Trading Commission, the government agency that oversees the commodity and financial futures markets. The attached Kertatos Indictment outlines one such scam.

Contact Us

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Centeral Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.