The Minnesota Department of Commerce announced today that investors who purchased retail precious metals, such as gold coins, from Lear Capital may receive compensation as a part of Lear’s bankruptcy plan. Securities regulators in Minnesota and other states were investigating Lear for deceptive securities and commodities activities and misleading marketing at the time of the company’s bankruptcy.   

Under the terms of the bankruptcy plan, Lear will provide $5.5 million to be distributed to investors in Lear’s precious metals. Investors who filed a timely bankruptcy claim will receive refunds based on calculations determined by the bankruptcy plan. In addition, Lear will provide a prorated distribution of the remaining funds to investors who did not file claims. The prorated distribution applies to investors who bought precious metals between Jan. 1, 2016, and March 3, 2022. During that span, 565 Minnesota consumers conducted transactions with Lear. Commerce estimates 400 of them were overcharged. 

Under its bankruptcy plan, Lear also agreed to improve its sales practices and disclosures, including agreeing not to misrepresent its fee, not to offer portfolio assessments of securities holdings, not to hold itself out as an investment adviser in any way, and not to provide investment advice or commit securities or commodities fraud. 

“Lear Capital urged investors to liquidate their traditional retirement savings and buy precious metals without proper fee disclosures, and as a result of those deceptive practices, the company racked up millions of dollars at investors’ expense,” said Jacqueline Olson, Assistant Commissioner of Enforcement. “The Department of Commerce is always looking out for Minnesota consumers, including main street investors, to protect them from harmful and deceptive business practices.” 

Various regulators had alleged that the Los Angeles-based company, which sells and buys back metals through both direct-to-consumer transactions and self-directed IRA transactions, used deceptive business practices, and violated investor protection laws. These actions were resolved as part of the $5.5 million bankruptcy settlement. 

If you were a Lear investor and have questions about the bankruptcy plan, contact the Department of Commerce at 651-539-4065. 

MEDIA CONTACT: 

Brett Benson, Assistant Director of Communications
Minnesota Department of Commerce
brett.benson@state.mn.us