Secretary of State Jay Ashcroft announced that investors who purchased retail precious metals from Lear Capital will receive compensation as a part of Lear’s bankruptcy plan. A coalition of securities regulators from different states, including Missouri, were investigating Lear at the time of the company’s bankruptcy.
Various 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.
Under the terms of the bankruptcy plan, Lear will provide $5.5 million to be distributed to investors who filed a timely claim based on calculations approved by the court. In addition, Lear will provide a pro rata distribution of 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.
The bankruptcy plan also stipulates the company must improve its sales and disclosures practices. Lear, in future transactions, will not: misrepresent fees, offer portfolio assessments of securities holdings, operate under the pretense of an investment adviser, and will not provide investment advice or commit securities or commodities fraud.
“Lear Capital urged investors to liquidate traditional retirement savings and buy precious metals. As a result of deceptive fee practices, the company racked up millions of dollars at investors’ expense,” said Ashcroft. “The Missouri Securities Division is always monitoring activities to better protect investors from harmful and deceptive business practices.”
Ashcroft urges investors to call the toll-free investor protection hotline at 800-721-7996 for more information or to file a complaint.