States Recoup Overcharges for Investors in Lear Capital Bankruptcy
COLUMBUS, Ohio – Investors who purchased retail precious metals from Lear Capital will receive compensation as part of the company’s bankruptcy plan.
The Ohio Department of Commerce Division of Securities, along with other state securities regulators, had been investigating Lear for deceptive securities and commodities activities and misleading marketing at the time of the company’s bankruptcy, a news release states.
Under the terms of the bankruptcy plan, Lear will provide $5.5 million to be distributed to investors in the company’s precious metals. Lear investors who filed a timely bankruptcy claim will receive refunds based on calculations determined by the 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 Jan. 1, 2016, and March 3, 2022.
As a part of the bankruptcy plan, the company has also 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.
“Lear Capital urged 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,” Ohio Securities Commissioner Andrea Seidt said.
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.
Pictured at top: Gold bars. (pexels.com)
Published by The Business Journal, Youngstown, Ohio.