2020-2021 Recent Enforcement News

Colorado Division of Securities joins with CFTC to stop nationwide precious metals IRA, bullion coin scheme that solicited more than $185 million from defrauded senior investors 

DENVER – The Colorado Division of Securities, a division of the Department of Regulatory Agencies (DORA), announced today that it is part of a consolidated nationwide enforcement action to disrupt a fraudulent precious metals scheme that has allegedly solicited more than $185 million from seniors and other investors. 

On Tuesday, September 22, 2020, the Colorado Division of Securities, with the assistance of the Colorado Attorney General, the U.S. Commodity Futures Trading Commission, and 29 other states, filed a petition in the U.S. District Court for the Northern District of Texas alleging that Metals.com “had a reckless disregard for the truth” and that “virtually every one of their … investors … lost the majority of the funds invested in fraudulently overpriced Precious Metals Bullion.” 

Metals.com and its agents have been under regulatory scrutiny for the past two years. Prior to today’s action, 12 states, including Colorado, have taken separate enforcement actions against the firm and its sales representatives.  

“The defendants allegedly solicited more than $185 million from seniors and other vulnerable investors nationwide, including over $5 million in Colorado, by touting precious metals at grossly inflated prices,” Securities Commissioner Tung Chan said. “The defendants appear to have capitalized on investor fear of market instability and economic uncertainty. Investors suffered substantial losses from retirement savings by relying on the false representations that appear to have been made by the defendants and their sales representatives.” 

“Metals.com preyed on older Coloradans and others by using their fear of economic uncertainty to convince them to invest in metals at grossly inflated prices,” said Attorney General Phil Weiser. 
“Metals.com must be held accountable for the money it took unfairly from Coloradans, and that money must be returned to those who, especially during a pandemic, cannot afford that loss.” 

“That vulnerable populations were exploited by way of their fears and financial worries make this crime particularly contemptible,” said DORA Executive Director Patty Salazar. “The Division of Securities and Colorado Attorney General’s Office have worked diligently on this case with our partners in multiple states and at the federal level, and I am thankful that, due to their tenacity, the perpetrators of this fraud will be brought to justice.”  

The petition names TMTE Inc., also known as Metals.com, Chase Metals Inc., Chase Metals LLC, Barrick Capital Inc., Simon Batashvili, Lucas Asher, and Tower Equity LLC. The unregistered Beverly Hills, California-based firm and its sales representatives are accused of targeting elderly investors through traditional and social media, providing unregistered investment advisory services designed to “instill fear in elderly and retirement-aged investors and build trust with investors based on representations of political or religious affinity,” according to the petition. Investors were advised to liquidate their holdings at registered investment firms to fund investments in precious metals through self-directed individual retirement accounts and bullion coins, the petition said.  

The defendants also are accused of failing to disclose, among other things, what Metals.com and Barrick Capital Inc. 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. 

In 2019, the Colorado Securities Commissioner issued a cease and desist order against Metals.  In a separate action today, Commissioner Chan, with the assistance of the Colorado Attorney General, is also filing an action against Metals.com for violating that order.   

Despite these measures, the firm, in new iterations, continued to prey on elderly investors. Today’s coordinated state and federal action was a result of a multi-state collaboration by members of the North American Securities Administrators Association (NASAA), of which the Colorado Division of Securities is a member and the Commodity Futures Trading Commission’s Office of Cooperative Enforcement. 

The Colorado Division of Securities encourages investors to come forward if they suspect they have been targeted by similar precious metals investment schemes. Please contact the Division at (303) 894- 2320 or dora_securitieswebsite@state.co.us

The Department of Regulatory Agencies (DORA) is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit https://dora.colorado.gov for more information or call 303-894-7855/toll free 1-800-886-7675.