Colorado Securities Regulator Recoups Overcharges for Colorado Investors in Commodity Firm’s Bankruptcy Plan

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DENVER, CO – August 2, 2023  - Colorado Securities Commissioner Tung announced that investors that purchased retail precious metals from Lear Capital will receive compensation as a part of Lear’s bankruptcy plan. State securities regulators had been investigating Lear for deceptive securities and commodities activities and misleading marketing at the time of the company’s bankruptcy.
 
Under the terms of the bankruptcy plan, Lear will provide $5.5 million to be distributed to investors in Lear’s precious metals. Lear investors that filed a timely bankruptcy claim will receive refunds based on calculations determined by Lear’s bankruptcy plan. In addition, Lear will provide a pro rata distribution of the remaining funds to investors who did not file claims. The pro rata distribution applies to investors that bought precious metals from Lear between January 1, 2016 and March 3, 2022. 

As a part of Lear’s bankruptcy plan, the company has also agreed to improve its sales practices and disclosures, including agreeing not to misrepresent its fee, not to offer portfolio assessments of securities holdings, not to hold itself out as an investment adviser in any way, and not to provide investment advice or commit securities or commodities fraud.

“Lear Capital urged investors to liquidate their traditional retirement savings and buy precious metals without proper fee disclosures, and as a result of those deceptive practices, the company racked up millions of dollars at investors’ expense,” said Commissioner Chan. “The Colorado Division of Securities is always looking out for Main Street investors to protect them from harmful and deceptive business practices.”

Various regulators had alleged that the Los Angeles-based company, which sells and buys back metals through both direct-to-consumer transactions and self-directed IRA transactions, used deceptive business practices, and violated investor protection laws. These actions were resolved as part of the $5.5 million bankruptcy settlement.

About DORA and the Division of Securities

DORA is the state's umbrella regulatory agency, charged with managing licensing and registration for multiple professions and businesses, implementing balanced regulation for Colorado industries, and protecting consumers. Our nearly 600 employees are dedicated to preserving the integrity of the marketplace and promoting a fair and competitive business environment throughout Colorado. 

The Division of Securities exists to protect investors and maintain confidence in the securities market, while avoiding unreasonable burdens on the marketplace by licensing securities professionals, enforcing securities law violations, and helping Coloradans become more informed investors.