FORT LAUDERDALE, FL – September 17, 2015 – The U.S. Commodity Futures Trading Commission (CFTC) has filed a civil enforcement complaint against Stuart Rubin, 51, of Fort Lauderdale, Florida, alleging fraudulent off-exchange precious metals transactions targeting retail customers. The complaint, filed in the U.S. District Court for the Southern District of Florida, also names Mintco LLC and Richard Q. Zimmerman as defendants.
The CFTC alleges that from July 2011 through the present, Rubin, along with Zimmerman, controlled Mintco LLC and engaged in the unlawful solicitation of retail customers to buy and sell precious metals – including gold, silver, platinum, and palladium – on a leveraged basis. These transactions were conducted through telemarketing and Mintco’s website.
According to the complaint, Mintco failed to meet requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which mandates either the delivery of precious metals within 28 days or that customers qualify as eligible contract participants (ECPs). The CFTC asserts that Mintco’s customers did not meet the ECP criteria, no metals were actually delivered within the required timeframe, and Mintco itself did not acquire or store financed metals on behalf of its customers.
The agency further alleges that Mintco defrauded customers by misrepresenting the performance of the precious metals, the break-even price for investments, and the true nature of its relationship with customers. Mintco reportedly charged commissions and fees totaling up to 37.5% of the investment and failed to disclose that over 80% of customers purchasing stored precious metals did not cover storage costs, interest, and other fees, resulting in a loss on their investments.
Mintco also contracted with Worth Group Inc. to manage its obligations, but the CFTC claims these transactions also failed to meet the 28-day delivery requirement. The CFTC previously sued Worth Group in 2013, alleging similar violations and securing a preliminary injunction.
The CFTC is seeking injunctive relief, disgorgement of ill-gotten gains, and civil penalties against Mintco, Rubin, and Zimmerman. The outcome of the litigation remains pending.
Source: CFTC.gov
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