Securities Arbitration Lawyers BlogSalt Lake City Precious Metals Dealer Engaged in $170M Ponzi Scheme
The CFTC, along with the Utah Department of Commerce, Division of Securities, through its Attorney General, jointly filed a civil enforcement action in the U.S. District Court for the District of Utah, Central Division. They filed against Gaylen Dean Rust and his business Rust Rare Coin (RRC). The complaint charges Rust and his company with committing fraud against approximately 200 individuals from Utah, and also from 16 other states. Rust allegedly obtained more than $170 million from investors since May 2013 in a precious metals ponzi scheme.
The complaint states that Rust’s fraudulent actions are ongoing. From January to August of 2018, Rust received $42 million from investors, which he claimed he used to buy and sell silver. He also allegedly attempted to solicit new investors recently.
On November 15, 2018, the U.S. District Court Judge for the District of Utah, Honorable Tena Campbell, entered a restraining order to freeze Rust’s assets and to permit the CFTC and State of Utah to inspect his records. Jonathan O. Hafen was appointed as a temporary receiver to take control of RRC and Rust’s assets.
A putative class of investors sued JPMorgan Chase & Co. and a group of precious metals traders employed by the bank in New York federal court Wednesday, saying they manipulated futures contracts through spoofing, days after the U.S. Department of Justice announced a former trader had pled guilty to his role in the alleged scheme.