The SEC has filed a complaint against Safeguard Metals LLC and its owner, Jeffrey Santulan, for allegedly misleading hundreds of elderly investors and engaging in a multimillion-dollar scheme. Safeguard Metals LLC is a Wyoming Limited Liability Company located in Woodland Hills, California. Jeffrey Santulan is the only Safeguard member, and he owns 100% of the company.
According to the SEC’s complaint, from December 2017 to July 2021, Safeguard and Santulan acted as investment advisers, persuaded investors to sell their existing securities, transfer the proceeds into self-directed Individual Retirement Accounts, and invest the proceeds into gold and silver coins by making false and misleading statements about the safety and liquidity of the investors’ securities investments, Safeguard’s business, and its compensation.
Safeguard and Santulan allegedly targeted investors at or near retirement age using the Safeguard website, online advertisements, and direct calls. According to the SEC, Safeguard marketed itself as a full-service investment firm with offices in London, New York City, and Beverly Hills that employed prominent individuals in the securities industry and had $11 billion in assets under management. In reality, Santulan allegedly operated the company from a small leased space in a Woodland Hills, California office building using sales agents.
The SEC complaint further alleges that Safeguard’s sales agents used prepared scripts, some written by Santulan, filled with false and misleading statements about how the market would crash and how their retirement accounts would be frozen under a new ‘unpublicized’ law.
Safeguard and Santulan also allegedly misled investors about Safeguard’s commissions and markups on the coins, charging average markups of approximately 64% on its sales of silver coins instead of the 4% to 33% markups that they disclosed to investors. Silver coins constituted over 97% of the total coins it sold to investors.
According to the complaint, Safeguard obtained approximately $67 million from selling coins to more than 450 primarily elderly retail investors and kept approximately $25.5 million in markups.
The SEC’s complaint charges Safeguard and Santulan with violating the antifraud provisions of the federal securities laws. The SEC seeks permanent injunctions, disgorgement of allegedly ill-gotten gains, plus interest and civil penalties.