WASHINGTON, D.C. – On April 8, 2014, the U.S. Commodity Futures Trading Commission (CFTC) announced settled charges against Charles Victoria, of Sun Valley, California, and his company, PGS Capital Wealth Management, for defrauding customers in off-exchange precious metals transactions. The CFTC also brought charges against Rockwell Asset Management, Inc. and its owner, Frank O. Davies, of Delray Beach, Florida, for similar offenses.
The CFTC found that from January 2012 to February 2013, Victoria, along with PGS Capital Wealth Management and PGS Capital Credit, Inc., unlawfully solicited retail customers to buy and sell precious metals – including gold and silver – on a financed basis. Customers were enticed with the promise of purchasing metals with a deposit of only 20-25% of the total price, with the remainder financed through PGS.
Similarly, from July 2011 to February 2013, Davies and Rockwell Asset Management, Inc. engaged in the same unlawful practice, soliciting retail customers for financed precious metals transactions. Rockwell had previously operated under the name Rockwell Gold Investments, Inc.
According to the CFTC, both PGS and Rockwell failed to execute these transactions on a CFTC-approved exchange, a legal requirement for financed commodity transactions with retail customers. Instead, funds from customers were transferred to Hunter Wise Commodities, LLC, without disclosure to the investors. Hunter Wise then remitted commissions and fees back to PGS and Victoria, and to Rockwell and Davies.
The CFTC’s investigation revealed that neither PGS nor Rockwell ever purchased, sold, loaned, stored, or transferred any physical precious metals for these transactions. No actual metals were delivered to customers.
As a result of the settlement, Charles Victoria and PGS Capital Wealth Management will jointly pay $462,727.50 in restitution to defrauded customers. Frank O. Davies and Rockwell Asset Management, Inc. will jointly pay $477,210 in restitution. Both Victoria and Davies are permanently banned from registering with the CFTC and from engaging in further violations of the Commodity Exchange Act. They are also prohibited from offering illegal, off-exchange transactions.
Source: CFTC.gov
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