SEC v. Safeguard Metals LLC; and Jeffrey S. Santulan, No. LR-25322, Central District of California (Feb. 2, 2022) — Press Release

SEC Files Fraud Charges Alleging a Multi-Million Dollar Scheme That Targeted Retirement Accounts Litigation Release No. 25322 / February 2, 2022 Securities and Exchange Commission v. Safeguard Metals LLC and Jeffrey S. Santulan, Case No. 2:22-cv-00693 (C.D. Cal. filed February 1, 2022) The Securities and Exchange Commission today announced charges against Safeguard Metals LLC, and its owner, Jeffrey Santulan, for engaging in a multi-million dollar fraudulent scheme involving hundreds of investors who were at or near retirement age. According to the SEC's complaint, from December 2017 through at least July 2021, Safeguard and Santulan acted as investment advisers and persuaded investors to sell their existing securities, transfer the proceeds into self-directed Individual Retirement Accounts, and invest the proceeds into gold and silver coins by making false and misleading statements about the safety and liquidity of the investors' securities investments, Safeguard's business, and its compensation. As alleged, Safeguard fraudulently marketed itself as a full-service investment firm with offices in London, New York City, and Beverly Hills that employed prominent individuals in the securities industry and had $11 billion in assets under management. In reality, Santulan allegedly operated the company from a small leased space in a Woodland Hills, Calif. office building using sales agents. The complaint further alleges that Safeguard's sales agents used prepared scripts, some written by Santulan, that were filled with false and misleading statements about how the market was going to crash and how their retirement accounts would be frozen under a new 'unpublicized' law. Safeguard and Santulan also allegedly misled investors about Safeguard's commissions and markups on the coins, charging average markups of approximately 64% on its sales of silver coins, instead of the 4% to 33% markups that they disclosed to investors. According to the complaint, Safeguard obtained approximately $67 million from the sale of coins to more than 450 mostly elderly, retail investors, and kept approximately $25.5 million in mark ups. The SEC's complaint, which was filed in federal district court in the Central District of California, charges Safeguard and Santulan with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and also charges Santulan with aiding and abetting Safeguard's violations and as a control person within the meaning of Section 20(a) of the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains, plus prejudgment interest, and civil penalties. The SEC's investigation was conducted by Jedediah B. Forkner and Jean M. Javorski of the SEC's Chicago Regional Office, and was supervised by Anne C. McKinley. The litigation will be led by Jonathan S. Polish. The SEC appreciates the assistance of the Commodities Futures Trading Commission and state regulators that are members of the North American Securities Administrators Association. SEC Complaint

SEC Files Fraud Charges Alleging a Multi-Million Dollar Scheme That Targeted Retirement Accounts Litigation Release No. 25322 / February 2, 2022 Securities and Exchange Commission v. Safeguard Metals LLC and Jeffrey S. Santulan, Case No. 2:22-cv-00693 (C.D. Cal. filed February 1, 2022) The Securities and Exchange Commission today announced charges against Safeguard Metals LLC, and its owner, Jeffrey Santulan, for engaging in a multi-million dollar fraudulent scheme involving hundreds of investors who were at or near retirement age. According to the SEC's complaint, from December 2017 through at least July 2021, Safeguard and Santulan acted as investment advisers and persuaded investors to sell their existing securities, transfer the proceeds into self-directed Individual Retirement Accounts, and invest the proceeds into gold and silver coins by making false and misleading statements about the safety and liquidity of the investors' securities investments, Safeguard's business, and its compensation. As alleged, Safeguard fraudulently marketed itself as a full-service investment firm with offices in London, New York City, and Beverly Hills that employed prominent individuals in the securities industry and had $11 billion in assets under management. In reality, Santulan allegedly operated the company from a small leased space in a Woodland Hills, Calif. office building using sales agents. The complaint further alleges that Safeguard's sales agents used prepared scripts, some written by Santulan, that were filled with false and misleading statements about how the market was going to crash and how their retirement accounts would be frozen under a new 'unpublicized' law. Safeguard and Santulan also allegedly misled investors about Safeguard's commissions and markups on the coins, charging average markups of approximately 64% on its sales of silver coins, instead of the 4% to 33% markups that they disclosed to investors. According to the complaint, Safeguard obtained approximately $67 million from the sale of coins to more than 450 mostly elderly, retail investors, and kept approximately $25.5 million in mark ups. The SEC's complaint, which was filed in federal district court in the Central District of California, charges Safeguard and Santulan with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and also charges Santulan with aiding and abetting Safeguard's violations and as a control person within the meaning of Section 20(a) of the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains, plus prejudgment interest, and civil penalties. The SEC's investigation was conducted by Jedediah B. Forkner and Jean M. Javorski of the SEC's Chicago Regional Office, and was supervised by Anne C. McKinley. The litigation will be led by Jonathan S. Polish. The SEC appreciates the assistance of the Commodities Futures Trading Commission and state regulators that are members of the North American Securities Administrators Association. SEC Complaint