Hollywood Company Targeted for Illegal Precious Metals Deals
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In the investing world, metals are always considered a good bet. No doubt that was part of the sales pitch one Hollywood company and its partners made to investors over a two-year period. But now the U.S. Commodity Futures Trading Commission is going after International Monetary Metals Inc. (IMM) and its former president, Martin Sommers, for setting up millions of dollars in illegal and unregulated metal transactions.
The complaint against the company and Sommers was filed last week in federal court. The filing lays out an investment opportunity that looked attractive but was allegedly really a dog. IMM roped in clients with telemarketing and through its website. The company offered to put customers in a "leveraged, margined, or financed" transaction for precious metals. Investors put down only a total of the metal's value, as low as 20 percent. They then received a loan from IMM for the remainder of the metal's value.
But according to the government's complaint, this was fruit that was never going to squeeze out a lot of juice for investors. IMM loaded the transaction with fine print. "[D]ue to the high fees, finance charges and commissions, IMM's customers rarely broke even on their investments, let alone earned a profit, because so much of their principal investment was consumed by these charges," the complaint says.
The government says that between July 2011 and March 2013, IMM solicited and took in around $6 million from 240 retail customers for precious metals. When the deals were done, IMM would send along the orders to two additional companies. But two companies IMM passed along orders to -- $640,028 to a company called Worth Group Inc. in Jupiter, $187,832 to AmeriFirst Management -- failed to deliver the precious metals to customers.
Plus, all the transactions were illegal because IMM was not registered with the trading commission as a futures commission merchant. As a result, the commission is going after the company for violations of the Commodity Trading Act.
A phone number for IMM has been disconnected, and the company's website also no longer works. Calls to a number listed for Sommers were not answered.
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