by Brian Mahany
Although many people don’t follow the price of gold, just about everyone knows it is selling at record prices. Turn on late night TV and you are guaranteed to see at least one jeweler offering to pay “top dollar” for your gold jewelry. Unfortunately, criminals watch TV and read the paper too. With the rise in gold prices has come the rise in gold scams.
Several weeks ago, the owner of the Gold Bullion Exchange in Florida pleaded guilty to scamming 1400 investors out of almost $30 million. Investors were allowed to “purchase” gold on margin through the exchange. The gimmick was that by using margin, a little money could buy a lot of gold. Unfortunately for the investors, there hard earned money didn’t buy any gold.
Companies that allow investors to purchase gold or other precious metals on margin (leverage) are a common target for scam artists. Even if legitimate, purchasing on margin is very risky; a small change in price could wipe out the entire investment instantly.
With many of these scam companies, it’s impossible to recover your money once its gone. At least if you deal with a licensed broker dealer, there is a much better ability to recover your investment if the investment turns out to be a total hoax. Commodities brokers and stockbrokers have an obligation to perform due diligence on investments they recommend to you. If they fail in those duties you may have a claim against them. If you deal directly with the promoter through a sales person that calls you over the telephone or asks you to wire money immediately, your money may be gone forever.
Legitimate investment companies have usually been around for quite some time, are licensed and can be checked out through state and federal security regulators. Many states have toll free numbers and the CFTC, SEC and FInancial Industry Regulatory Authority (FINRA) have free on-line tools to check out sales agents and brokers.
Gold may be a great investment but be careful who you invest with and how you invest.
If you have been the victim of an investment fraud or scam caused by a stockbroker, commodities broker or financial planner, call us. We may be able to help you recover your money. All calls are without obligation and completely confidential. For more information, contact attorney Brian Mahany at or by email at
Mahany & Ertl, LLC – America’s Fraud Lawyers. Offices throughout the United States.