The Mississippi Secretary of State’s Office, represented by the Mississippi Attorney General’s Office, joined the Commodity Futures Trading Commission (CFTC) and 29 other states in filing a complaint in the U.S. District Court for the Northern District of Texas alleging Metals.com and Barrick Capital Inc. defendants solicited $185 million from 1,600 seniors and other vulnerable investors nationwide, including over $350,000 in Mississippi, by touting precious metals at grossly inflated prices that were not disclosed.
“They capitalized on investors’ fear of market instability and took advantage of hard-working Mississippians,” said Secretary of State Michael Watson.
“Our investors suffered consequential losses from retirement savings, and it’s only right that we take action. We’re working closely with the Attorney General’s Office to ensure the victims of this case receive justice, and we encourage all investors to thoroughly scrutinize and research any investment opportunity or offer.”
The complaint names Los Angeles, California-based companies TMTE Inc., also known as Metals.com, Chase Metals Inc., Chase Metals LLC, Barrick Capital Inc., along with Simon Batashvili, Lucas Asher, and Tower Equity LLC.
The defendants are accused of using cold calling, television, radio, and social media advertisements designed to “instill fear in elderly and retirement-aged investors and build trust with investors based on representations of political or religious affinity.”
Investors were advised to liquidate their holdings at registered investment firms to fund investments in precious metals bullion through self-directed individual retirement accounts and bullion coins, the complaint said.
“This historic joint effort between the CFTC and 30 state regulators is an important step toward rooting out fraud across the country,” said CFTC Chairman Heath P. Tarbert.
“This case highlights just how geographically broad commodities fraud can be in our rapidly-evolving financial markets and how important it is for regulators at all levels of government to work together to pursue bad actors and protect market participants.”
The defendants also are accused of failing to disclose, among other things, the markup Metals.com and Barrick charged investors for their precious metals bullion products and that investors could lose the majority of their funds immediately upon completing a transaction.
The defendants charged investors prices for gold or silver bullion averaging from 100% to more than 300% the melt value or spot price of that gold or silver bullion. In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase.
“The defendants were preying on seniors and other vulnerable persons, grossly misrepresenting the value and likelihood of financial profit of the investments they were selling and scamming consumers out of their retirement savings,” said Mississippi Attorney General Lynn Fitch.
“I appreciate the work of the Secretary of State in this matter, and we will continue to work together to protect the rights of Mississippi consumers.”
The complaint requests the Court order the defendants to cease sales activity, return money to investors, and stop defrauding investors and violating federal and state laws going forward. The complaint also requests that a receiver be appointed to take over the companies to marshal funds for the benefit of investors across the country.
Metals.com and its agents have attempted to evade previous regulatory actions from 12 states by, among other tactics, changing its business name. Today’s coordinated state and federal action to put a stop to the company’s efforts to continue to prey on elderly investors is the result of a multi-state collaboration by members of the North American Securities Administrators Association (NASAA), of which the Secretary of State’s Office is a member, and the Commodity Futures Trading Commission’s Office of Cooperative Enforcement.
