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Robert W Pearce
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Mr. Pearce has tried, arbitrated and mediated numerous disputes involving complex securities, commodities, administrative, contract, commercial, business tort and employment law issues for over 30 years. He has represented hundreds of clients in Federal and state courts (trial and appellate) as... More
My company:
The Law Offices of Robert Wayne Pearce, P.A.
My blog:
The Investor's Rights Law Blog
  • INVESTORS IN FLORIDA BEWARE OF HIGHLY LEVERAGED PRECIOUS METALS DEALERS 0 comments
    Jan 25, 2013 11:43 AM

    Florida has recently been faced with a resurgence of boiler room type operations pushing highly leveraged precious metals. Historically, boiler rooms were associated with securities and commodities futures trading, and they have had a presence in South Florida for many years. Today, they consist of salespeople who use high-pressure sales tactics to market speculative, and even fraudulent, investments. The salespeople use calls lists (aka sucker lists) and scripts to pitch securities and commodities to potential investors. Most of the salespeople have no formal market training and oftentimes make up facts to close a sale.

    Florida does not require highly leveraged precious metals dealers to apply for and maintain a license in order to act as an introducing broker or a clearing/counter party firm. However, they are required to apply to the Florida Department of Agriculture for a telemarketing license. They are also required to file the scripts that are to be used when contacting potential investors. Many of these scripts are never filed with the Department - they are usually buried in other marketing materials distributed for internal use by brokers. Although regulators have actively sought to shut down dealers of such type due to violations, Florida still remains a hotbed for highly leveraged precious metals dealers. As for investors, it is oftentimes too late for them to hedge against the risk of losing their life savings once a dealer has gone bust.

    A precious metal is a rare and natural metallic element of high economic value. Historically, precious metals were important as currency but are now regarded mainly as investment commodities. Gold, silver, platinum, and palladium are among the most popularly traded precious metals. The demand for precious metals is driven not only by their practical use but also by their role as hedges against market risk. Leverage is a technique used in finance to multiply gains by borrowing money, which increases purchasing power. The most obvious risk associated with leverage is that it can multiply losses. Since precious metals markets are extremely volatile and unpredictable, the use of leverage can dramatically increase the risk of losing all of one's principal if prices were to swing in the opposite direction.

    Have you suffered losses in highly leveraged precious metals? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

    The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

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