Attorney General Alan Wilson Announces that Investors Will Recoup Overcharges from Precious Metals Seller Lear Capital
August 4, 2023
Attorney General Alan Wilson announced today that investors who purchased precious metals from gold and silver seller Lear Capital will receive compensation as a part of Lear’s bankruptcy plan. At least forty-two State and Territory securities regulators had been investigating Lear for deceptive securities and commodities activities and misleading marketing at the time of the company’s bankruptcy.
“Lear Capital used an aggressive advertising campaign to convince investors to liquidate their traditional retirement savings and buy precious metals without proper fee disclosures, and as a result of those deceptive practices, the company racked up millions of dollars at investors’ expense,” said Attorney General Wilson. “The Securities Division of my office enforces the securities laws in South Carolina and seeks to protect investors against harmful, fraudulent, and deceptive business practices.”
Under the terms of the bankruptcy plan, Lear will provide $5.5 million to be distributed to investors in Lear’s precious metals. Lear investors who filed a timely bankruptcy claim will receive refunds based on calculations determined by Lear’s bankruptcy plan. In addition, Lear will provide a pro-rata distribution of the remaining funds to investors who did not file claims. The pro-rata distribution applies to investors who bought precious metals from Lear between January 1, 2016, and March 3, 2022.
In addition, as a part of Lear’s bankruptcy plan, the company has agreed to improve its sales practices and disclosures, including agreeing not to misrepresent its fee, not to offer portfolio assessments of securities holdings, not to hold itself out as an investment adviser in any way, and not to provide investment advice or commit securities or commodities fraud.
State regulators had alleged that the Los Angeles-based company, which sells and buys back metals through both direct-to-consumer transactions and self-directed IRA transactions, used deceptive business practices, and violated investor protection laws. These actions were resolved as part of the $5.5 million bankruptcy settlement.
The Securities Division can be reached by calling 803-734-9916 or by emailing [email protected]. Investors can submit a complaint or learn more about the Securities Division by visiting the Attorney General’s Office website at https://www.scag.gov/inside-the-office/legal-services-division/securities/.
