Our investment fraud attorneys help victims of precious metal and exotic diamond frauds by con artists who promise quick profits from investing in rare diamonds or other exotic gems. Investors should be wary of any aggressive sales tactics or violations of state or federal securities laws.
Possible Fraudulent Sales Pitch Include:
- Current news already known to the public such as:
“The hurricane created a disruption, you are certain to earn big returns on your deposit.”
- Cold callers who call themselves “metals dealers” or “merchants” or “diamond experts.”
- Advertised on radio, television, or online through paid infomercials.
- Insist on your name, phone number, and email and home address before you agree to make a purchase.
- Calls received from a broker or salesman from the company to promote the precious metals or diamonds purchase.
Boiler Rooms’ Favorite Tactics
- Dangling the prospect of wealth and enticing you with something you want, but can’t have with little or no risk.
“This rare diamond is guaranteed to rise double what your current investments are doing.”
- Trying to build credibility by claiming to be with a reputable firm or to have a special credential or experience without substance.
“Believe me, as a senior vice president of XYZ Metals Merchant Inc., I would never sell an investment that doesn’t produce” or “my reputation is everything.”
- Leading you to believe that other savvy investors have already invested.
“This is how Sam on your block got his start. I know it’s a lot of money, but this is how the country club got its members.”
- Creating a false sense of urgency by claiming limited supply.
“We just got this diamond in inventory and it’s going to move fast.”
Profits Generated Through Margin or Leverage
- Claiming you can make a lot of money with little risk by purchasing through a “financing agreement” or “margin agreement.”
- Structured so you only pay a small percentage upfront (about 25%) of the total purchase price.
- Full price paid by a loan, that the company arranges, to finance the rest of your purchase.
- Claims that the company will store the precious metals for you in a storage facility or “bank.”
Rare Diamond Investment Warning Signs!
- States that investment grade diamonds are not regulated by the CFTC, National Futures Association or any rules or regulations.
- Agreement that does not identify the financial institution or bank that will be loaning you the money.
- Agreement that does not identify where the physical metal or diamonds is located.
- Claims to deliver the physical metal to an overseas storage facility.
- Difficulty in verifying the company’s license.
- A salesperson that cannot provide a way to prove their licensure from a government agency.
- A salesperson offering highly complex purchasing techniques for unusual success.
- Missing documentation that seems necessary.
- No GIA or other certificates of authenticity.
Before Investing in Diamonds, Ask, Ask, and Ask Some More!
Our New York and Florida licensed attorneys represent investors nationwide in a variety of investment fraud schemes. Precious metals, rare diamonds and other alternative investments can be risky and con artists are creative. If you believe you have lost money in rare diamonds or other precious metals, you may have a potential claim. For a free evaluation of your potential case by as securities attorney, please contact Silver Law Group.
Silver Law Group is a nationally-recognized securities law firm headquartered in South Florida representing investors worldwide with their claims for losses due to securities and investment fraud. The firm has successfully recovered multi-million dollar awards for its clients through securities arbitration and the courts. To contact Scott L. Silver to discuss your legal matter, call toll-free (800) 975-4345 or e-mail him at SSilver@silverlaw.com.