If you assume the size of a company indicates trustworthiness, this Daily Business Review article may cause you to think again. Regulators found the publicly traded company A-Mark Precious Metals, Inc. (A-Mark) and its subsidiary Goldline Inc. guilty of fraudulent conduct related to a precious metals investment scheme, sending shockwaves through the precious metals brokerage community. As I was quoted by Aaron Cohn in the article detailing A-Mark’s actions, “These firms are the bane of the precious metals industry. It is no wonder many would-be investors approach precious metals dealers with such trepidation and mistrust.”
Under A-Mark’s subsidiary’s “Collateral Finance Program,” customers could purchase precious metals, then use these new assets as collateral for loans to buy additional metals from Goldline. The customers did not receive their precious metals until the loan was satisfied and were required to pay storage fees. This structure violated the 28-day delivery requirement of the Dodd-Frank Act. For further details regarding A-Mark’s case, you may download the attached file to read the full article.
As I stated to Aaron Cohn, “The vast majority of individuals that are new to investing in precious metals simply wish to purchase bullion coins or bars and take physical possession of them.” Due to investment cons, these individuals often “find themselves having purchased a highly leveraged fractional ownership in precious metals, all of which have excessive markups, high finance charges applied on the entire balance (not just their fractional ownership), and subsequent margin calls on even the slightest decline in price.”
Selecting the right brokerage to do business with is essential to prevent yourself from falling victim to investment schemes such as A-Mark’s. Rather than looking for brokerages offering flashy investment strategies, align yourself with a company committed to educating customers and helping them invest in a way that is tailored to their unique goals.
I have worked with a lawyer, Aaron Cohn, on these types of precious metals fraud cases as an expert. He is an attorney experienced in representing victims of precious metals fraud that understands how the various confidence schemes work. He is actively pursuing several dozen claims for victims, including claims against brokers that offer leveraged retail accounts to customers. His contact information is here if you have an issue you would like to discuss with him: https://www.wwhgd.com/people-cohn-aaron.html
