Washington, D.C. – The Commodity Futures Trading Commission (CFTC) has settled charges against Goldline, Inc. and A-Mark Precious Metals, Inc., both California-based companies, for fraud related to off-exchange retail commodity transactions. The firms were also cited for failing to register as a Futures Commission Merchant and for conducting illegal off-exchange transactions.
The CFTC order requires Goldline and A-Mark to jointly pay $627,801.78 in disgorgement and a $450,000 civil monetary penalty. Additionally, the companies must cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
According to the CFTC, between April 2018 and June 2021, Goldline solicited orders for leveraged, margined, or financed precious metals transactions from retail customers. These transactions occurred outside of regulated exchanges or execution facilities.
The investigation revealed that Goldline engaged in sales solicitation fraud by misrepresenting the percentage increase needed in the bid price for customers to break even on sales back to Goldline. The company also falsely claimed it would directly buy back metals from customers, contradicting its solicitation materials and account agreements. Goldline’s management was aware of these misrepresentations but failed to correct them.
A-Mark is held liable for Goldline’s violations as its principal. The case was led by CFTC staff members Alan Edelman, James Deacon, Michelle Bougas, Erica Bodin, James Holl III, and Rick Glaser.
The CFTC urges customers to be aware of the warning signs of fraud, particularly in precious metals transactions, and encourages them to check a firm’s registration status with the National Futures Association before investing. Suspicious activity can be reported to the CFTC via its hotline at 866-FON-CFTC or through its online tip/complaint portal.
Source: CFTC.gov
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