Evaluating Safeguard Metals: A Detailed Critique

Once reputed for its standing in the precious metals market, Safeguard Metals has recently questioned its credibility due to recent legal troubles. Can the firm truly validate its positive consumer sentiments? Are its operations genuinely lawful?

• Product: Precious Metals

• Proprietor: Jeffrey Santulan

• Cumulative Rating: 1.0/5

A Closer Look at Safeguard Metals

Upon visiting the Safeguard Metals website, they offer financial advisory and wealth management services. However, the Securities and Exchange Commission contradicts this notion, stating no company personnel are certified financial advisors. Instead, all are merely sales representatives peddling precious metals.

Safeguard Metals primarily focuses on precious metals IRAs, aiming to assist clients in transitioning their retirement savings into valuable metals. Nevertheless, they've faced legal scrutiny due to alleged deceptive practices involved in this process.

It's important to remember that there are legal operators in the precious metals IRA market. Such businesses provide complete transparency about your assets and avoid giving misleading information. They've built a credible reputation, supported by copious positive customer reviews. It's more prudent to consider partnering with these firms. At present, Safeguard Metals is embroiled in a significant controversy.

Unmasking the Truth: Is Safeguard Metals a Fraud?

The legitimacy of Safeguard Metals can be ambiguous. While some customers have been serviced per the company's promises, as evident from a handful of positive reviews online, the overall outlook isn't too rosy.

However, the remaining data paints a grim picture.

Safeguard Metals carries an 'F' grade from the Better Business Bureau, their lowest rating. This rating results from the 12 complaints lodged against the company, three of which went unanswered. Furthermore, the company's accreditation with the BBB has been rescinded.

The revoked accreditation is prominently displayed on their site, indicating a violation severe enough to discredit all prior operations. The revocation was reportedly due to their inability to address complaints adequately, and they have faced legal action.

Moreover, two legal notifications related to the company need closer scrutiny.

❑ The Minnesota Misstep

Like several precious metal dealers, Safeguard Metals stumbled upon legal issues. In 2020, Minnesota, the only state necessitating special permissions to sell bullion in specific quantities, initiated government action against them.

Online dealers of precious metals often need to pay more attention to the necessity of legal documentation required to service Minnesota. It's a classic case of not keeping up with legal responsibilities, leading to severe repercussions.

The company allegedly sold bullion to Minnesota residents in quantities exceeding the permissible legal limit. For such transactions, registration with the Department of Commerce was essential, which they still need to obtain.

They concluded the allegations by paying a penalty of $10,000, assuring not to infringe any laws or orders in the state hereafter.

This kind of situation is not uncommon among precious metals companies. While it does hint at inadequate research, it doesn't always spell doom. However, the subsequent legal action is far more critical.

❑ Accusations of Fraud

In February 2022, the company faced charges of fraud brought against it by the Securities and Exchange Commission. Jeffrey Santulan, the proprietor, was also implicated in the fraudulent activities. It's crucial to highlight that the proceedings are ongoing at the time of this writing, and the company retains its innocence until found guilty. Yet, these are the charges they stand accused of.

The SEC they were asserted that the firm was involved in a fraudulent operation that defrauded investors out of millions of dollars, with most of the victims being elderly or nearing retirement.

The indictment suggests that these activities occurred at the earliest between late 2017 and July 2021. The company's owner unlawfully posed as an investment advisor, persuading investors to liquidate their retirement accounts, establish self-directed IRAs, and divert all their savings into gold and silver.

The indictment accuses the company of making false declarations and deceiving customers about the safety and liquidity of these assets. Customers were misled into believing Safeguard Metals would offer fair value during liquidation, but this was different.

The indictment further alleges that the company misrepresented its operational scale. It presented as a comprehensive investment firm, boasting offices in New York City, Beverly Hills, and London, employing leading securities experts, and managing $11 billion in assets.

Contrary to these claims, the indictment reveals the company had a modest office in Woodland Hills, California. It was run by sales personnel, not licensed investment advisors or securities agents.

The accusations don't end here. More complaints include salespeople using scripted false statements about the economy, warning customers of a market crash, frozen accounts, and permanently inaccessible assets unless transferred into precious metals.

Lastly, Safeguard Metals is accused of being dishonest about their markups and commissions. They informed investors that their markups ranged between 4% to 33%. However, the average markup was about 64%, more than double their highest estimate.

The indictment mentions that Safeguard Metals generated $67 million by selling coins to over 400 investors, predominantly elderly, yielding a profit of at least $25.5 million from markups.

While companies can price their products as they wish, deceitful practices regarding markups are not permissible. Safeguard Metals made themselves susceptible to legal proceedings by misleading investors about the markups.

While none of these allegations have been proven, they are indeed grave. The unresolved complaints on the BBB website further indicate issues with the company's management and operations. But remember, the case is still ongoing.

The Advantages & Drawbacks of Safeguard Metals

 Advantages

• None are to be noted.

 Drawbacks

• Loss of BBB accreditation due to neglecting several complaints.

• The company and its proprietor are facing fraud charges of millions of dollars.

• Considerably poor management across the board.

• Exorbitantly high price markups.

• The sales team employed aggressive tactics and used scripted and inaccurate pitches.

Final Thoughts

It's uncommon to stumble upon a company mired in as many issues as Safeguard Metals. Once upon a time, they held BBB accreditation, received primarily favorable customer feedback, and held a place of trust in the industry. However, that's all crumbled now.

The company has ceased to address complaints lodged against it. Even when customers report having their money taken, the firm still needs to respond. Concurrently, the SEC has slammed the business with fraud charges for misleading investors. Allegedly, the firm amassed over $20 million through deceitful gains.

While these accusations are yet to be substantiated in a court of law, the several unaddressed grievances on the BBB website paint a telling picture. Even if not all the allegations of fraud hold water, the sheer lack of communication is a glaring warning sign. You would want to avoid engaging with a company that disregards you when facing a problem.

We categorically discourage choosing this company. Stick with alternatives that offer superior overall service and enjoy better reputations.