INDIANAPOLIS – Indiana Securities Division has announced that investors that purchased retail precious metals from Lear Capital are eligible to receive compensation as a part of the investment business’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.
Under the terms of the bankruptcy plan, Lear will provide $5.5 million to be distributed to investors in Lear’s precious metals. Lear investors that filed a timely bankruptcy claim will receive refunds based on calculations 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 that bought precious metals from Lear between January 1, 2016, and March 3, 2022.
As a part of Lear’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.
“Lear Capital urged investors to liquidate their traditional retirement savings and buy precious metals without proper fee disclosures, and because of those deceptive practices, the company racked up millions of dollars at investors’ expense,” said Secretary of State Diego Morales. “The Securities Division is always looking out to protect Hoosiers from harmful and deceptive business practices.”
Various regulators had alleged that the Los Angeles-based company, 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.
If you have questions or concerns about investments or a financial professional, please contact the Indiana Securities Division at 317-232-6681.
