Gold Investment Securities Fraud


Why Gold has Turned into Securities Fraud

The price of gold has reached an all time high. So has securities fraud designed to cash in on America’s get-rich-quick dreams. There have been multiple actions recently against those comitting gold stocks securities fraud. In one action brought against a brokerage firm in Florida by the CFTC (Commodity Futures Trading Commission), a scheme akin to the strategy used in the movie “Boiler Room” defrauded investors of over $23 million.

The Tools used in Gold Stock Securities Fraud

Most gold stock securities fraud involves the stocks of mining or exploration companies. The stock value is based on the estimated gold reserves in a given claim. The problem (as anyone who watches the TV show “Gold Rush” knows), no one can tell how much gold is in a claim or a mine until it has been mined. Your promising land specimen may show all of the geological signs necessary to make you believe there may be gold there, but, until it is mined out, no one can tell if there is gold and, if so, how much there is. It’s a crap shoot; A roll of the dice, with the planet as the house, jealously guarding it’s reserves. For example, in 2010 the SEC (Securities and Exchange Commission) took legal action against a mining company based out of Florida for false press releases and other misleading statements associated with a mining project in Ecuador. The release said the gold reserves were worth over $1 billion. [1] Of course, the value of the reserves cannot be calculated until the mine stops producing gold. Any miner will tell you, you know when to quit digging when there is nothing left to dig out. So how did they come up with a gold value of $1 billion?

More Gold Stock Securities Fraud to Come

In this ongoing series, We’ll examine the six key warnings signs that you may have run into a gold stockssecurities fraud.

Please, if you are not getting anywhere with resolving securities issues on your own, call S. David Anton of Anton Legal Group!

S. David Anton, Esquire is a Certified Arbitrator for the Financial Industry Regulatory Authority (FINRA), formerly the NASD, which is the national organization responsible for overseeing the securities industry. He has served as a Judge/Panelist and rendered decisions in many securities arbitration cases, giving him a unique perspective on his client’s individual situation.