What You Need to Know
- The alleged fraud targeted hundreds of investors who were at or near retirement age.
- The SEC says Safeguard Metals sales agents used prepared scripts that were filled with false and misleading statements.
- Safeguard obtained about $67 million from coin sales to more than 450 investors, and kept some $25.5 million in markups, the complaint states.
The Securities and Exchange Commission said Tuesday that it has charged Safeguard Metals LLC and its owner, Jeffrey Santulan, with engaging in a multimillion-dollar fraud involving hundreds of investors who were at or near retirement age.
According to the SEC’s complaint, from December 2017 through at least July 2021, Safeguard and Santulan acted as investment advisors and persuaded investors to sell their securities, transfer the proceeds into self-directed individual retirement accounts, and invest the proceeds in gold and silver coins by making false and misleading statements about the safety and liquidity of the investors’ securities investments, Safeguard’s business and its compensation.
The complaint states that Safeguard and Santulan “targeted investors who were at or near retirement age through Safeguard’s website, through online advertisements on sites like Facebook and Google, and through direct calls.”
The Commodity Futures Trading Commission and 27 state securities regulators announced a parallel joint civil enforcement action against Safeguard in the U.S. District Court for the Central District of California the same day.
Santulan had authority over Safeguard’s website, which during much of the relevant time period falsely claimed that the company had $11 billion in assets under management and an office in London, the order states.
“He also had authority over Safeguard’s LinkedIn page, which was connected to fake profiles of prominent individuals in the securities industry showing that they were associated with Safeguard,” according to the complaint.
Santulan allegedly operated the company from a small leased space in an office building in Woodland Hills, California, using sales agents, the SEC said.