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Silver-Coin IRA Seller Resolves $68 Million Fraud Allegations with CFTC

Posted on November 9th, 2023 at 2:20 PM
Silver-Coin IRA Seller Resolves $68 Million Fraud Allegations with CFTC

From the desk of Jim Eccleston at Eccleston Law 

Safeguard Metals and its sole owner, Jeffrey Ikahn, reportedly defrauded customers to whom it promoted gold IRAs, resulting in alleged losses of $68 million as reported recently by InvestmentNews.

According to the lawsuits, Safeguard misled over 450 customers by misrepresenting key information about the company. They also accused Safeguard of using a markup averaging 50% higher than what they disclosed on the coins they sold, mainly silver collectibles they recommended to clients. The lawsuits noted that Safeguard significantly overstated its assets under management, claiming $11 billion when the actual figure was closer to $75 million. Additionally, the company allegedly inflated its employee headcount and qualifications. 

Between 2017 and 2021, the company significantly downplayed the markups on its sold products and its sales representatives pressured elderly clients to transfer funds from their retirement accounts to purchase silver coins, according to court documents. The markups imposed by the company on its customers ranged from 51 percent to 71 percent, while customer agreements indicated "operating margins" of 23 percent to 42 percent, according to court records. 

As a result of the legal actions, the company and Ikahn, previously known as Jeffrey Santulan, agreed to permanent injunctions preventing them from violating securities laws. They also committed to paying yet-to-be-determined restitution and monetary penalties. According to InvestmentNews, a similar agreement was reached with the SEC in July. 

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters. 

Tags: eccleston, eccleston law

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