The CFTC announced a fine for yet another fraudulent precious metals dealer one of “several customer protection Fraud Advisories that provide the warning signs of fraud” for precious metals dealers.
This announcement is not new. This press release is one of over two hundred, two hundred and seven, announcements about precious metals dealers who have run afoul of the rules by the CFTC.
The most recent violator is Hannes Tulving, Jr. (Tulving) of Newport Beach, California, and his company The Tulving Company, Inc.,
A consent order found starting in, “August 2013 through in or about January 2014, Defendants represented to members of the public that Tulving Company was a large, stable, and highly reputable precious metals firm that delivered precious metals to customers. As a result, at least 381 persons from locations throughout the United States submitted orders with Tulving Company for the purchase of more than $150 million in precious metals; however, Defendants fraudulently failed to purchase precious metals with at least $15 million of the customers’ funds.
“Defendants knew that their representations to some of the customers regarding the purchase of precious metals were false because they did not purchase precious metals on behalf of some customers and, in fact, misappropriated a portion of customer funds by, among other things, using customer funds to fulfill other customers’ orders, paying debts of the company, and also returning the money to previous customers who did not receive their coins, all in furtherance of keeping the business going.”
In July 2017, the CFTC made a splash when it accused Monex of causing $290 million in losses.
Here’s part of a story from the Orange County Register.
“Monex offered leveraged trading in gold, silver, platinum and palladium to customers through its ‘Atlas’ program. Monex deceptively touted the program as a “safe, secure and profitable way to invest in precious metals.”
“Instead, nearly everyone who opened one of 12,000 Atlas accounts lost money in a six-years span, the CFTC said.”
Monex was a fixture on cable news, making this a very high-profile case.
Regardless, the CFTC pointed to “the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.” The press release announcing the Tulving incident noted.
The CFTC continued.
“Also, before investing or trading with a firm, check the firm’s registration status and disciplinary history, if registered, with the National Futures Association. A company’s registration status can be found at: www.nfa.futures.org/basicnet.
“Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.”
Below is from the “Precious Metals Sales Warning Signs!” category.
- States that precious metals transactions are not regulated by the CFTC or the National Futures Association.
- Agreement that does not identify the financial institution or bank that will be loaning the you money.
- Agreement that does not identify where the physical metal is located.
- Claims to deliver the physical metal to an overseas storage facility.
- Difficulty in verifying the company’s license.
- A salesperson that cannot provide a way to prove their licensure from a government agency.
- A salesperson offering highly complex purchasing techniques for unusual success.
- Missing documentation that seems necessary.