The perpetrators of an investment scam that pitched overpriced precious metals investments to retirees and seniors have been ordered to pay over US$51 million in restitution and penalties by a U.S. district court in California.
In a coordinated enforcement action by the U.S. Commodity Futures Trading Commission (CFTC) and 30 U.S. state securities regulators, Safeguard Metals LLC and Jeffrey Ikahn (aka Jeffrey Santulan and Jeffrey Hill) were found to have run a fraudulent investment scheme that took in about US$68 million from vulnerable investors.
According to a consent order obtained by regulators back in 2023, investors were lured with false claims about the risk of traditional investments, and they were then sold precious metals at inflated prices, including undisclosed markups that immediately caused large losses.
In a final judgment, the firm and Ikahn have now been ordered to pay US$25.6 million in restitution, and a US$25.6-million penalty. They were also barred from future violations, and prohibited from trading, or registering with the CFTC, and in the participating states.
In a separate case brought by the U.S. Securities Exchange Commission (SEC), the court also ordered US$25.6 million in disgorgement and a US$25.6 million penalty — although amounts paid in one action will offset by the amounts owed in the other.