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Precious metals — gold, silver, platinum and palladium — are bought by investors primarily to hedge against inflation, economic uncertainty and foreign exchange risk, in the belief that these metals, particularly gold, are repositories of absolute value, whereas paper currencies and securities dominated in such currencies have relative value and are vulnerable to loss. Precious metals are traded by “speculators” who hope to profit from volatility in the financial market place. If you are not a qualified speculator, you should think long and hard about investing in this arena.
As an average, honest individual, it is difficult to understand the mindset of a fraudster. To provide you with insight into the mind of a thief, we have attached a copy of a typical sales pitches used by such individuals. Please follow this link. Additionally, we have provided you with a copy of a typical “close” by these precious metals companies. After reading the “pitch” and the “close,” you can see why there is so much danger involved in dealing with these companies.
If you are contacted about investing in precious metals or other commodities look for these warning signs:
If you have been exposed to any of these things, call Russell L. Forkey, P.A., for an immediate free initial consultation. Time is not on your side.A Closer Look at Precious Metal Scams
To graphically demonstrate how these scams work, I will provide you with two recent examples. In the first example, out of a $160,000 investment, the clients in three weeks lost $105,000. $95,000 of the loss was the direct result of commissions and administrative fees charged by the firm. In the second example, the investor, a foreign citizen, lost approximately $38,000 out of a total investment of approximately $44,000. Approximately 50% of the investment was charged as commissions and administrative fees by the broker. In the first case, the clients would have had to make almost a 100% return on their investment just to break even. In the later case, the client would have had to make approximate 50% return to break even. This makes no sense whatsoever.Recent Important Update
In recent conversations with governmental authorities, it appears that many of the so-called precious metal “clearing companies” do not take possession of the metals. What apparently transpires is the following;
Under these circumstances, the investor might never find out if he or she ever had an interest in the actual metal as opposed to everything being on paper. It would be the equivalent to a ponzi scheme.
These types of situations may be brought under control, if the CFTC begins to license these firms for as it stands now, they are basically unregulated. It’s almost like the “wild west.”
If these precious metals firms do become subject to regulation, it is our belief that many of them will go out of business. Consequently, time is of the essence if you have lost money and want to attempt to recover the same.Talk With an Experienced Precious Metals Litigation Attorney
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of the law relating to precious metals fraud, our firm provides all 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 online or by telephone at 561-406-4644 to arrange your free initial consultation.