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Monex Precious Metals is one of the biggest precious metals dealers in the US. Or at least, it used to be. In the past, their Atlas program was used to help people trade gold and silver on an individual basis. But then the company became the subject of one of the biggest fraud cases that the CFTC has ever compiled.
What exactly happened? What was Monex Precious Metals accused of, and were they ever proven to have done it?
It should be noted that the same principals from the investigation are still in charge of the company. According to the BBB website, Monex is still in business. However, there aren't very many recent reviews online. It seems that Monex has lost a good portion of its customer base following the fraud allegations.
Some of the allegations were settled through a court order. Other parts of the case made it all the way to the Supreme Court of the United States.
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Is Monex Precious Metals a Scam?
It's a very serious thing to call a company a scam. In order to be a scam, a company needs to sell products or services that they don't actually follow through on. They need to have the intention of stealing people's money and lying to their customers.
It's hard to definitively say whether Monex Precious Metals is a scam because the allegations were settled. This means that no one ever admitted to guilt. But serious government action was taken against the business because of defrauding allegations.
In addition, the company has astoundingly terrible reviews. On the BBB, there are four customer reviews, all of which give the company the lowest rating of 1 out of 5 stars. Then there have been 5 complaints filed in the prior three years, although only one was filed in the last twelve months.
Multi-Million Dollar Fraud Charges
The federal government charged Monex Precious Metals with fraud in 2017. They alleged that the company founder had purposefully defrauded people of millions of dollars with a false precious metals trading platform. The allegations were filed against Monex Deposit, Monex Credit, and Newport Services. All together, these companies make up Monex.
The civil charges were also filed specifically against Louis Carabini and Michael Carabini, who were the principals of the company at the time. The complaint says that the principals defrauded people of millions and millions of dollars through their trading platform. This trading platform also involved illegal precious metals transactions that were not properly registered.
This civil case was one of the biggest fraud cases that has ever been brought against any company.
The allegations stated that Monex used its "Atlas" program to let customers trade palladium, platinum, gold, and silver. But the marketing for the program stated that it would be profitable, secure, and safe. And yet almost every customer who traded through the platform for seven years lost money.
The allegations stated that the trading platform led to over $290 million in losses.
So how did the program manage to go on for so long? According to the allegations, the principals engaged in the following behaviors:
The commissioner who filed the complaint said that the company caused many people to lose their life savings. A lot of those were elderly people who were confused into the situation.
In addition, the complaint said that every single transaction conducted through the Atlas program had been illegal. This is because they were not run through an official exchange, and they were not subject to the same laws and rules governing an exchange.
The principals of the company should have registered with the CFTC as Futures Commission Merchants, since they were using their platform to facilitate the exchange of precious metals. However, they never did. Both of the defendants received civil charges for registration violations and fraud.
When the complaint was first filed, the CFTC was seeking to shut down the Atlas program. They got their wish in 2021, when the injunction was affirmed. This forced the company to shut down the Atlas program. The allegations were considered settled once the Atlas program was shut down.
The CFTC also said that it was looking to have the dishonest gains removed from the principals. They wanted restitution to be made to everyone who had an account. They were also seeking civil fines, permanent bans on trading and registration, and permanent injunctions if the defendants violated commodities laws again in the future.
This case went all the way to the Supreme Court in 2020. The CFTC made an effort to enforce a $290 million civil action against the Monex company. But the Supreme Court appears to have dismissed this action. Despite the CFTC trying to bar the principals from doing any more trading, Monex is still in business.
But its reviews are terrible.
Let's take a quick look at a few of the recent complaints and poor reviews.
The most recent complaint filed with the BBB was posted at the end of February in 2022. The customer said that he was a small business owner who had been purchasing from Monex since 2019. Monex then wired over $70,000 from the customer's bank account, even though the customer had never approved this.
The customer said that the problem happened when his email inbox was hacked. The hacker emailed a Monex representative and asked for a change of bank account. Then they asked for Monex to wire more than $70,000 into the account. The hacker then requested another transfer, at which point Monex said that the charges would need to be confirmed via the phone.
The hacker said he'd call Monex on his break at work. Monex sent an email to say that they'd tried to get in contact, but no one was answering. The representative asked the hacker to call back, rather than continuing to call. The hacker was then able to successfully impersonate the account owner and receive the second transfer.
When the situation came to light, Monex made an offer to return $10,000 of the money that had been stolen. The customer was not satisfied with this because he believed that Monex was responsible for the loss of his funds.
A respondent from the company indicated that the customer had actually sent this to the wrong place. The customer agreed to go to the correct channels, and the complaint was marked as resolved.
Since this complaint actually wasn't perpetuated by Monex, there haven't been any complaints filed in the past year. But the company also doesn't seem to be doing much successful business since the civil fraud charges.
The poor customer reviews talk about how the company is impossible to contact, doesn't deal with complaints, and is staffed by rude representatives. One customer said he waited hours for a call back, left three messages, and was never contacted. Then the company suddenly got back to him when the price of the metals he wanted went up.
There are also people who stated that they lost most of their life savings through Monex's Atlas program. These reviews were posted in 2019. The customers said that the losses were incurred because of deceptive tactics, manipulation, and lying. The customers suffered major debt and some of them lost their stable housing.
Pros & Cons of Monex Precious Metals
It's a wonder that Monex Precious Metals is still in business. There have been many attempts to shut them down by the CFTC. One of those attempts was partially successful, as the Atlas program was forcibly closed in 2021. But the Supreme Court rejected the $290 million judgment taken against the company.
There was enough evidence for the CFTC to make a court case, one that went all the way to the Supreme Court. There are hundreds of customers who testify that they or their family members lost their full life savings. Allegedly, the company participated in manipulative and dishonest tactics to push their Atlas program. The Atlas program was operating illegally, as it was not registered to sell commodities.
There aren't a lot of recent reviews of the company. Most people seem to be steering clear after the fraud business. All of the reviews from 2019 through 2021 are overwhelmingly negative. Some customers said that they were in such bad debt that they lost their housing and needed to live in their cars. Many of these customers were elderly and lost decades of retirement savings.
It's unclear whether there are any still-pending charges against Monex. But either way, don't do business with this company. Even if the fraud case wasn't enough, the overwhelmingly negative feedback should be. Customers say they've been miserable and that the company representatives do little to help.
Comparatively, there are many companies that do their best to satisfy every customer. You're better off working with one of these than with Monex.
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