The U.S. Commodity Futures Trading Commission (CFTC) has filed an Order settling charges against Anthony Lauria and Gold Coast Bullion, Inc. (GCB), for illicit off-exchange precious metals transactions.
The latest CFTC action snaps a recent streak of FX related verdicts, culminating in a crackdown of retail FX regulation and added protection for traders. In this instance however, the CFTC found that Mr. Lauria and his company GCB was responsible for illegal, off-exchange precious metals transactions.
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More specifically, this includes fraud in connection with illegal transactions, and for operating GCB as an unregistered Futures Commission Merchant (FCM). As a result of the violations, the CFTC has lobbied a restitution fine of $5,940,124.16 along with a civil monetary penalty of $3.75 million – the order also bars registration and trading bans on Lauria and GCB.
According to the CFTC manifest, Mr. Lauria solicited customers for precious metals transactions, along with GCB telemarketers. In addition:
- The customer needed to deposit only a percentage of the total metal value, typically 25 percent
- That GCB would arrange for the customer to receive a loan for the remaining 75 percent, and
- That the customer would have to pay a finance charge on the loan, as well as a service charge, according to the Order.
Despite the deposit of funds and commissions totaling more than $2.6 million, GCB never actually delivered any precious metals in connection with these transactions.
Instead, GCB executed customers buy or sell orders via another company, AmeriFirst Management LLC (AML). AML did not purchase or sell any physical metals in connection with these transactions. Back in July of 2013, AML received its own charges from the CFTC for illegal, off-exchange precious metals transactions and fraud.