San Juan Capistrano, CA – January 21, 2015 – Bharat Adatia, also known as Brad Adatia, has been slapped with a permanent injunction and hefty financial penalties after being found liable for a fraudulent precious metals scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced today. The case, filed in the U.S. District Court for the Central District of California, alleges Adatia and his companies, Lions Wealth Holdings, Inc., Lions Wealth Services, Inc., and 20/20 Precious Metals, Inc., fraudulently solicited retail customers into off-exchange precious metals trading.
According to the CFTC’s complaint, dating back to September 30, 2013, the defendants falsely claimed to sell physical metals – including gold, silver, platinum, and palladium – and to provide loans for their purchase, along with secure storage. However, the CFTC alleges no physical metals were ever sold, transferred, or stored on behalf of customers. Instead, funds from investors were used for paper transactions with a third party, Hunter Wise Commodities, LLC.
Judge Josephine L. Staton’s Consent Order, entered January 16, 2015, requires Lions Wealth and Adatia to jointly pay $1,773,013 in restitution, while 20/20 Metals and Adatia are jointly responsible for $543,227, bringing the total restitution to $2,316,240. In addition to restitution, the defendants must pay a $3,072,490 civil monetary penalty. The order also permanently bans them from trading, soliciting, and registering with the CFTC, prohibiting any further violations of the Commodity Exchange Act.
The fraudulent activity occurred between July 16, 2011, and February 22, 2013. During this period, at least 44 Lions Wealth customers reportedly suffered losses totaling over $1,807,712 in trading losses, commissions, interest, and fees. An additional 30 customers of 20/20 Metals incurred losses exceeding $570,266. The CFTC claims Adatia knew, or recklessly disregarded the fact, that no physical metal backed the transactions.
Melanie Damian, Esq. has been appointed to collect restitution and distribute funds to affected customers. Damian previously served as Special Monitor, Corporate Manager, and Equity Receiver in a related CFTC enforcement action against Hunter Wise and its affiliates. The CFTC cautions that restitution orders do not guarantee full recovery of lost funds, as wrongdoers may lack sufficient assets.
Source: CFTC.gov
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