2020
Texas Attorney General Ken Paxton and the Texas State Securities Board joined the Commodity Futures Trading Commission (CFTC) and 29 other states in a complaint, filed in the Northern District of Texas, against TMTE Inc. aka Metals.com, Chase Metals Inc., Chase Metals LLC, Barrick Capital Inc., Simon Batashvili, Lucas Asher, and Tower Equity LLC (Metals.com) to stop them from continuing to defraud elderly people across the United States by converting their retirement savings into supposed precious metals. The defendants pilfered vulnerable investors’ retirement savings by touting precious metals at grossly inflated prices. The defendants used traditional and social media marketing to target investors and then built trust with investors based on political and religious affinity. They capitalized on investor fear of market instability and economic uncertainty. Senior citizens suffered devastating losses of retirement savings by relying on false representations made by the defendants and their sales representatives.
“I will not stand by as these companies use deceptive tactics and underhanded attempts to siphon cash from Texans who seek only to wisely invest their hard-earned retirement savings. The abuse of hardworking Texans, particularly senior citizens who look forward to a secure retirement, cannot be allowed to continue,” said Attorney General Paxton. “Companies that take advantage of Texans will be held accountable.”
“A report of suspected financial exploitation filed with the Texas State Securities Board by a registered firm drew Metals.com to our attention. This important reporting requirement was the product of the good work of Governor Greg Abbott and the 85th Legislature which provided a valuable tool for the Texas State Securities Board to defend Texas’ vulnerable investors and legitimate businesses. We appreciate the quality work of the CFTC and General Paxton’s office as well as that of our sister states in continuing to seek redress for harmed investors. The coordinated state effort was the result of a multi-state endeavor by members of the North American Securities Administrators Association (NASAA). All involved in this hard and honest work should be pleased and proud of their contributions to a historic effort and collaboration between the CFTC and state securities regulators,” said Travis J. Iles, Texas Securities Commissioner.
On May 1, 2019, Commissioner Iles entered an Emergency Cease and Desist Order against TMTE, Inc. aka Metals.com, Chase Metals LLC, Chase Metals Inc., and three sales representatives, Athena Hunter, Walter Vera, and Michael Kendall. On July 1, 2019, Metals.com agreed to offer a refund to 84 Texas investors and to strengthen company compliance and training. The agreement was ultimately found to be hollow. Meanwhile, states across the country mobilized against Metals.com and its sales representatives. 11 other states undertook similar protective measures against the companies and their sales representatives. These actions can be found at - https://www.ssb.texas.gov/actions-against-metals.com
Despite the states’ investor protection efforts, the defendants were not dissuaded from preying on elderly victims. They continued to defraud investors and acted duplicitously by soliciting investors through various iterations of the Metals.com name. In the complaint, the CFTC, Texas, and 29 other co-plaintiff states allege Metals.com “had a reckless disregard for the truth that virtually every one of their … investors … lost the majority of the funds invested in fraudulent, overpriced Precious Metals Bullion.” Our investors’ losses occurred at the moment they entrusted their savings to the defendants.
A statutory restraining order, now public, was granted on September 22, 2020, after entry by the Honorable David C. Godbey. The restraining order froze the defendants’ assets, granted the CFTC and state co-plaintiffs immediate access to defendant’s records, and appointed a temporary receiver. A hearing on the plaintiffs’ motion for preliminary injunction and extension of the appointment of the temporary receiver is scheduled for October 6, 2020 at 10:00 a.m. before the Honorable Sam A. Lindsay. The receiver’s primary responsibility will be to marshal funds for the benefit of defrauded investors across the country.
Texas Assistant Attorney Generals, Christina Cella, Lea N. Brigtsen, and Cynthia Morales, are leading Texas’ efforts in the ongoing litigation. Texas State Securities Board enforcement attorneys, Rachel Anderson Rynders, Tina Lawrence, and Matthew Wise have been instrumental in coalescing the states’ efforts within NASAA membership and bringing this civil action against the defendants.
Links of interest to investors:
https://www.ssb.texas.gov/news-publications/news-releases
https://www.ssb.texas.gov/investors
https://www.nasaa.org/contact-your-regulator/
https://www.nasaa.org/2669/gold-related-investments/?qoid=investor-advisories
The Texas State Securities Board encourages investors to contact us if they suspect they have been targeted in similar precious metals investment schemes – https://www.ssb.texas.gov/contact-us. And always investigate before you invest.