The attempt to try and save would be low premium bullion buyers from buying or getting involved in poor silver and gold industry practices is an uphill battle.
Yet if even a few potential bullion buyers learn some proper due diligence tactics while also being forewarned on potential industry pitfalls, then the creation, publication, and communication of such buy bullion safely content will have been a success.
Today we turn to the recently dismissed CFTC vs Monex lawsuit which ranges from 2011 to 2017.
The allegations of fraud are large in an industry whose retail sales volumes are dwarfed in comparison to the volumes of precious metal derivatives traded week in week out.
The crux of last year’s dismissed CFTC charge revolves around Monex Atlas Accounts, which according to CFTC allegations are illegal off-exchange trading platforms for precious metals.
On pages one and two of the late 2017 CFTC complaint versus Monex, summary point 2 makes the following allegation:
“Monex offers off-exchange, leveraged precious metals trading to retail investors through its “Atlas” program. Monex deceptively pitches its Atlas program as a safe, secure and profitable way for retail customers to invest in precious metals. It is not. To the contrary, approximately 12,000 leveraged Atlas accounts collectively realized more than $290 million in losses between July 16, 2011 and March 31, 2017—an average of more than $4 million a month.
Approximately 90% of leveraged Atlas accounts lost money during this period. Despite touting the benefits of the Atlas program, Monex never discloses to prospective customers the massive and pervasive losses suffered by its customers.”
You can read the leveraged Monex Atlas Account agreement details. If you get confused while reading it, well perhaps you should never go near it with any hard earned capital.
If considering a Monex Atlas Account, you might want to search and find 19 mentions of the term ‘default’ and how not maintaining sufficient funds in the account within 24 hours may result in your losing all your account funds.
You might also take into account historical lessons of how the once famed silver investing Hunt Brothers went ultimately bankrupt stemming from large leveraged losses in the silver 1980 price crash.
CFTC vs Monex Lawsuit Appeal
The following footage was recently taken in San Francisco at the US Court of Appeals for the Ninth Circuit.
In it the U.S. Commodity Futures Trading Commission (CFTC) appeals the district court’s recent dismissal of its enforcement action against Monex Credit Company, alleging that Monex operated an illegally unregistered commodity trading platform.
Of question often in these and prior proceedings are the ambiguous terms of ‘delivery’ and the ’28 day’ threshold which if physical precious metals in question are not delivered within such a timeframe, the CFTC by current law gains jurisdiction over such precious metal transactions.
In other words, if a bullion dealer is wholly corrupt and simply takes funds from customers with non-existent inventory, never buys precious metals on behalf of the customer, nor delivers any metals within the 28-day threshold… the CFTC can and often does take legal action.
The CFTC’s website is not all that well organized but here is a third party’s handy list of some gold silver frauds it has effectively shut down in recent years. The about.ag website documents 20 various CFTC complaints with a wide cornucopia of recent frauds in this industry.
These kinds of sad situations do happen on a reoccurring basis (here’s one alleged gold silver fraud making news just two days ago).
Damn well indeed why it is important to know your potential counter-party’s honest track record. It is both critical to bullion buying success and safety.
Good news is there are many high volume online bullion businesses today who offer transparent pricing and services. You can easily and for free learn some common and perhaps not so common sense solutions in bullion buying/selling best practices here.
This brand, after all, has been advertised on television for decades. That means it’s trustworthy, right?
Well, apparently TV ad campaigns continue to reap some dividends even though Monex has lost massive market share to more transparent easier to purchase from online bullion dealers.
And while surely expensive to fight off lawsuit after lawsuit, the Monex brand continues to be ingrained in likely older generations minds as a name to possibly search out when its time to buy silver, buy gold, etc.
So as the CFTC continues to lose vs Monex in the US legal court system over its fraud allegations and complaint dismissal appeals.
The ongoing historical lists of Monex complaints and Monex lawsuits, should at the very least stand trial by those who might ever consider buying whatever these seemingly nice people are still selling.
Caveat Emptor – (noun) the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.
About the Author
James Anderson has a BA in finance from Loyola University New Orleans. He has both worked and invested in the physical investment grade bullion markets prior to the 2008 global financial crisis.