IRA Metals Firm Safeguard Metals LLC Gets Charged by the SEC, Allegedly Jacking up Prices of Silver Coins
Posted on 02/09/2022
Many investment firms market precious metals, gold, and silver to U.S. baby boomers. U.S. federal securities laws prohibit deceptive conduct and material misrepresentations in the purchase or sale of securities. On February 1, 2022, the Securities and Exchange Commission (SEC) announced charges against Safeguard Metals LLC, and its owner, Jeffrey Santulan, for engaging in a multimillion dollar fraudulent scheme involving hundreds of investors who were at or near retirement age. According to the SEC’s complaint, from December 2017 through at least July 2021, Safeguard and Santulan acted as investment advisers and persuaded investors to sell their existing securities, transfer the proceeds into self-directed Individual Retirement Accounts, and invest the proceeds into gold and silver coins by making false and misleading statements about the safety and liquidity of the investors’ securities investments, Safeguard’s business, and its compensation.
Safeguard Metals LLC is a Wyoming Limited Liability Company with an office located in Woodland Hills, California. Jeffrey S. Santulan, age 41 is a resident of Tarzana, California. He is the only member of Safeguard. He owns 100% of the company. Santulan controls Safeguard and its operations, and has exclusive authority over its business decisions. Santulan has used the pseudonym “Jeff Hill” while representing Safeguard to investors.
The SEC press release states, “As alleged, Safeguard fraudulently marketed itself as a full-service investment firm with offices in London, New York City, and Beverly Hills that employed prominent individuals in the securities industry and had $11 billion in assets under management. In reality, Santulan allegedly operated the company from a small leased space in a Woodland Hills, Calif. office building using sales agents. The complaint further alleges that Safeguard’s sales agents used prepared scripts, some written by Santulan, that were filled with false and misleading statements about how the market was going to crash and how their retirement accounts would be frozen under a new ‘unpublicized’ law.”
The press release adds, “Safeguard and Santulan also allegedly misled investors about Safeguard’s commissions and markups on the coins, charging average markups of approximately 64% on its sales of silver coins, instead of the 4% to 33% markups that they disclosed to investors. According to the complaint, Safeguard obtained approximately $67 million from the sale of coins to more than 450 mostly elderly, retail investors, and kept approximately $25.5 million in mark ups.
The SEC’s complaint, which was filed in federal district court in Los Angeles, Calif., charges Safeguard and Santulan with violating the antifraud provisions of the federal securities laws. The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains, plus interest, and civil penalties.”
The Commodity Futures Trading Commission and 27 state securities regulatory agencies that are members of the North American Securities Administrators Association (NASAA) announced the filing of a joint civil enforcement action in the U.S. District Court for the Central District of California against Safeguard Metals LLC, and its owner, Jeffrey Santulan for orchestrating a US$ 68 million fraudulent scheme targeting elderly persons nationwide.