Business Registration Division – Securities

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
KA ʻOIHANA PILI KĀLEPA

JOSH GREEN, M.D.
GOVERNOR | KE KIAʻĀINA

NADINE Y. ANDO
DIRECTOR | KA LUNA HOʻOKELE

TY Y. NOHARA
COMMISSIONER OF SECURITIES

FOR IMMEDIATE RELEASE
August 2, 2023

Hawaiʻi to Recoup Overcharges for Investors in Commodity Firm Bankruptcy

HONOLULU – The Department of Commerce and Consumer Affairs (DCCA), through its Securities Enforcement Branch (SEB), announces that investors who purchased retail precious metals from Lear Capital (Lear) will receive compensation as a part of Lear’s bankruptcy plan. State securities regulators had been 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. Lear investors that filed a timely bankruptcy claim will receive refunds based on calculations determined by Lear’s bankruptcy plan. In addition, Lear will provide a pro rata distribution of the remaining funds to investors who did not file claims. The pro rata distribution applies to investors that purchased precious metals from Lear between January 1, 2016, and March 3, 2022.

As a part of Lear’s bankruptcy plan, the company has 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 Commissioner of Securities Ty Nohara. The SEB is always looking out for 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.

Investors are encouraged to come forward if they suspect they have been targeted by similar precious metals investment schemes. Please contact the DCCA’s Securities Enforcement Branch at (808) 586-2740 or via electronic mail at [email protected].

# # #

Media Contact:
William Nhieu
Communications Officer
Department of Commerce and Consumer Affairs
Email: [email protected]
Office: (808) 586-7582