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CFTC Charges Florida-Based Precious Metals Firm, Owner With Fraud

By Kitco News
Tuesday May 14th, 2013 9:51 AM

(Kitco News) - The U.S. Commodity Futures Trading Commission sued a Florida-based precious metals firm and its owner, saying the two committed fraud when they accepted more than $800,000 from about nine U.S. customers and misappropriated nearly all the money, the CFTC said late Monday.

The agency said it filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida on Monday against Global Precious Metals Trading Company, LLC of Coral Gables, Florida, and its owner Michael Ghaemi, who resides in Miami, Fla. The CFTC said that since July 2011, Global Precious Metals Trading Company and Ghaemi “solicited and accepted more than $800,000 from approximately nine U.S. customers in connection with illegal off-exchange retail commodity transactions and then misappropriated virtually all of the customers’ funds.”

The CFTC said the firm and its owner claimed they would buy and store physical metal, including gold, silver, platinum, and palladium, for customers. Further, the firm and Ghaemi told customers that there was a $25,000 minimum investment to buy physical metal and that Global Precious Metals Trading Company would arrange a loan where customers would finance the remaining amount of the total value of the physical metals purchased.

Instead of purchasing, storing, or financing the purchase of physical metals, the firm and Ghaemi “used the funds for Ghaemi’s benefit, including to make car payments, pay Ghaemi’s salary, pay for Ghaemi’s travel and entertainment expenses, and to margin their own speculative metals trading account in London,” the CFTC said. The agency said in its suit that the two defendants have returned less than $65,000 of the over $800,000 obtained from customers and that they misappropriated the remaining funds.

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By Debbie Carlson of Kitco News dcarlson@kitco.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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