Des Moines – The Iowa Insurance Division has announced that investors that purchased retail precious metals from Los Angeles-based Lear Capital will receive compensation as a part of Lear Capital’s bankruptcy plan. State securities regulators had been investigating Lear for deceptive securities and commodities activities and misleading marketing at the time of the company’s bankruptcy.
“Lear Capital urged investors to liquidate their traditional retirement savings and buy precious metals without proper fee disclosures, and as a result of those deceptive practices, the company racked up millions of dollars at investors’ expense,” Deputy Commissioner Andrew Hartnett said. “The Iowa Insurance Division is always looking out for Iowans to protect them from harmful and deceptive business practices. I encourage any Iowan that may have been affected to get in contact with our office.”
Under the terms of the bankruptcy plan, Lear Capital will provide $5.5 million to be distributed to investors in Lear Capital’s precious metals. Lear Capital investors that filed a timely bankruptcy claim will receive refunds based on calculations determined by Lear Capital’s bankruptcy plan. In addition, Lear Capital will provide a pro rata distribution of the remaining funds to investors who did not file claims. The pro rata distribution applies to investors that bought precious metals from Lear Capital between January 1, 2016 and March 3, 2022.
Iowans that purchased precious metals from Lear Capital during that timeframe should contact the Iowa Insurance Division at firstname.lastname@example.org or at 515-654-6475.
Various regulators had alleged that Lear Capital, which sells and buys back metals through both direct-to-consumer transactions and self-directed IRA transactions, used deceptive business practices, and violated investor protection laws. These actions were resolved as part of the $5.5 million bankruptcy settlement.
As a part of Lear Capital’s bankruptcy plan, 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.