NH investors eligible for compensation in $5.5 million deal with bankrupt precious metals firm
Lear Capital agrees to multi-state settlement as part of Chapter 11 plan
New Hampshire investors will be eligible for part of $5.5 million in a multi-state enforcement action against Lear Capital, a bankrupt company that sells and buys back metals through both direct-to-consumer transactions and self-directed IRA transactions.
The state securities regulators had been investigating the Los Angeles-based company for deceptive activities and misleading marketing at the time of the company’s Chapter 11 bankruptcy filing in March 2022.
The NH Bureau of Securities Regulation announced Monday that investors who purchased retail precious metals from the company will receive compensation determined by Lear’s bankruptcy plan.
In addition, Lear will provide a pro rata distribution of the 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 bureau said the company has also agreed to improve its sales practices and disclosures, including agreeing not to misrepresent its fee, not to offer portfolio assessments of securities holdings, not to hold itself out as an investment adviser in any way, and not to provide investment advice or commit securities or commodities fraud.
“Lear Capital urged investors to liquidate their traditional retirement savings and buy precious metals without proper fee disclosures. As a result of those deceptive practices, the company racked up millions of dollars at investors’ expense”, said Jeff Spill, deputy director of the bureau.