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Felix Shipkevich December 21, 2017
Mintco Precious Metals traders

Mintco Precious Metals Traders Fined and Banned by CFTC Court Order

Federal Court sides with CFTC Enforcement Actions filed on September 2015 against Florida-based Mintco LLC and their owners Stuart Rubin and Richard Q. Zimmerman. Consent Orders by Federal Judge Beth F. Bloom fines Mintco $250,000 and Zimmerman $45,000, as well as a 3-year trading and permanent registration ban on Rubin.

From July 16, 2011, Mintco marketed stored precious metals to retail customers, charging full price, and financing for a portion of the price, but were never stored them or delivered. Under the Dodd-Frank Act of 2010, Commodities transactions of this nature are unlawful unless they result in “actual delivery” of metals within 28 days of the purchase or sale. Mintco customers also did not qualify as Eligible Contract Participants as they did not have sufficient net worth. On October 7, 2015, the Commission filed complaints against Ruben and Zimmerman and on September 2017 charged them for violating the Commodity Exchange Act and CFTC regulations. As controllers of Mintco, they’re charged with illegal and fraudulent off-exchange transactions in precious metals. Mintco was never registered with the CFTC as a Futures Commission Merchant but charged commission for for the orders that were never delivered.

The CFTC reported in an official press release that,

The Consent Orders further find that Mintco and Rubin defrauded retail customers by misrepresenting or omitting to disclose material facts to potential or existing retail customers, which included:

  1. Misrepresenting the nature of the relationship between Mintco and retail customers by stating that Mintco would act in their best interest and as customer’s agent or representative;

  2. Not adequately disclosing the break-even price of investments in precious metal in financed transactions; and

  3. Omitting to inform customers that in excess of 80% of the retail customers’ investments in financed and fully paid stored precious metal failed to appreciate enough during the relevant period to cover the costs associated with the investment and earn a profit.

“The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets.  The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.”

CFTC’s Precious Metals Customer Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.

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.

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Last Updated: December 20, 2017

The original press release on cftc.gov can be found here and the court orders as well.