New York Attorney General Letitia James today announced that she, along with 29 additional states and the U.S. Commodity Futures Trading Commission (CFTC), have filed a lawsuit against Metals.com and a host of other entities and individuals for defrauding seniors across New York and the rest of the nation by soliciting more than $185 million and by charging exorbitant fees for overpriced precious metals. The lawsuit specifically names as defendants TMTE, Inc. (also known as Metals.com, Chase Metals, Inc., and Chase Metals, LLC), Barrick Capital, Inc., and Tower Equity, LLC, along with the individuals Simon Batashvili and Lucas Asher.
“These investors may have been sold on the comfort of investing in precious metals, but the defendants tarnished their dreams,” said Attorney General James. “This fraudulent scheme capitalized on investors’ fears of economic uncertainty, causing hundreds of seniors nationwide to lose substantial amounts of their retirement savings by relying on bald-faced lies. Our bipartisan coalition filed this lawsuit because we will not allow fraudulent companies to target seniors or other vulnerable investors and profit off of lies and other misrepresentations.”
The lawsuit — filed in the U.S. District Court for the Northern District of Texas — charges the Beverly Hills, California-based firm and its sales representatives with targeting elderly investors through traditional and social media and defrauding them into transferring funds from their traditional individual retirement accounts (IRA) into self-directed IRAs by misrepresenting that metals purchased from the defendants were a safe and conservative investment. In reality, however, the defendants charged undisclosed and excessive fees on precious metals sold to investors that resulted in instant and substantial losses, with many investors losing the majority of their investment funds immediately upon consummating the transaction. Often, 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 of precious metals. The complaint charges the defendants with violating the Commodity Exchange Act and various state securities laws.
The lawsuit asks the court to enjoin the defendants from engaging in any additional commodity-related activity, to order the defendants to return money to defrauded investors, and to stop the defendants from violating both federal and state laws. The petition also requests that a receiver be appointed to take over the companies in order to marshal funds for the benefit of investors across the country.
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 Office of the New York Attorney General is a member — and the CFTC’s Office of Cooperative Enforcement.
The Office of the New York Attorney General encourages any investors who suspect they have been targeted by similar precious metals investment schemes to come forward by contacting the office’s Investor Protection Bureau by e-mailing firstname.lastname@example.org.
Joining Attorney General James and the CFTC in filing today’s lawsuit are securities regulators and the attorneys general from various states, including Alabama, Alaska, Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Washington, West Virginia, and Wisconsin.
This matter is being handled by Assistant Attorneys General Tanya Trakht and Kenneth Haim and Senior Enforcement Counsel Matthew Woodruff, with assistance from Legal Assistant Eddie Aguilar, under the supervision of Deputy Bureau Chief Kevin Wallace and Bureau Chief Peter Pope — all of the Investor Protection Bureau. The Investor Protection Bureau is a part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.