California brokerage firm Red Rock Secured was charged by the Securities and Exchange Commission with a fraud scheme to peddle over-priced gold and silver coins for retirement investment plans.
The company, along with CEO Sean Kelly and two former executives, Anthony Spencer and Jeffrey Ward, are accused of convincing hundreds of investors to sell securities in their retirement accounts in exchange for gold and silver coinage at inflated prices.
From January 2017 through at least June 2022, the defendants solicited investors, telling them to protect their savings by selling assets in their 401(k), IRA or federal employee Thrift Savings Plan portfolios in exchange for the coins at a 1-5% markup.
The company specifically targeted older people with retirement accounts and right-wing political views, according to an August 2020 email from a Red Rock Secured employee to a provider of ad space cited in the SEC complaint.
The SEC claims that the advertised 1-5% markup was false and that the coin prices were in fact marked up as high as 130%, allowing the defendants to pocket more than $30 million of the $50 million they received from clients.
In addition, claims that Red Rock Secured made about retirement plans were also wrong, such as the idea that all TSP investments are tied to the stock market, according to the SEC.
“As our complaint alleges, the defendants used fear and lies to defraud investors out of millions of dollars from their hard-earned retirement savings,” SEC New York Regional Office Director Antonia Apps said.
The SEC is seeking a jury trial, civil penalties, a disgorgement of gains and to permanently bar Mr. Kelly from serving as an officer or director of a public company.
Red Rock Secured did not respond to a request for comment.
• Brad Matthews can be reached at bmatthews@washingtontimes.com.
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