Precious metal dealers facilitate the buying and selling of gold, silver, and other valuable precious metals. Whether operating through physical stores or online platforms, these experts act as intermediaries, connecting buyers and sellers while prioritizing transparency and fair transactions. They also offer invaluable insights on market trends and provide advice on investment opportunities.

With the global economy facing headwinds, investors seeking diversification may look to precious metals as a way to protect their wealth from economic turmoil and rising inflation. Many are turning to ETFs, mutual funds and futures, while others prefer the safety of raw bullion like bars and coins. With no single government entity that regulates the sales of physical bullion, however, the industry is susceptible to fraudulent activity and boiler rooms.

A number of recent cases involving precious metals dealers have highlighted the need for increased oversight in this sector. In one instance, Fisher Capital was ordered to pay a total of $185 million in damages after allegedly misappropriating money from hundreds of senior investors and committing fraud in the process. The firm was charged by both the SEC and the CFTC, which jointly filed the largest joint complaint in the history of the CFTC against an over-the-counter (OTC) marketplace in 2020.

The lack of regulatory oversight in this sector has led to a wide range of abuses. For example, a handful of bullion banks have been accused of ripping off thousands of people by charging undisclosed markups on gold and silver products sold over the Internet. Unlike regulated securities, such as stocks and bonds, physical gold is not considered to be a security, so it escapes the oversight of the SEC and the Securities Investor Protection Corporation. Instead, these companies are often regulated by the Commodity Futures Trading Commission, which has less clout and budget than the SEC or individual state departments that oversee businesses.

These issues underscore the need for greater vigilance by both regulators and private individuals. Consumers should seek out precious metal dealers and brokers who have established a solid reputation for excellence and adhere to strict industry standards. When selecting a dealer or broker, consumers should also be sure to understand the range of services offered and pricing structures.

While the heightened scrutiny surrounding these sectors will likely drive some investors to traditional financial institutions, those who choose to work with a Cincinnati gold dealer or broker should make sure they are fully licensed and follow industry regulations. In addition, they should carefully review a potential partner’s website to ensure it contains accurate information on their business model and credentials. Finally, they should check the CFTC’s complaint database to confirm that any complaints have been resolved. These steps will help consumers avoid being victims of fraud or misleading practices and ensure that their investments are secure. To learn more about protecting your investment portfolio, contact a securities litigation attorney with a background in precious metal buying and selling.