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Stanford Coins and Bullion
Wednesday, February 18, 2009

Recently, I looked a little deeper and found a trial pending in a Florida district court, Robert Shave, Plaintiff, v. Stanford Coins and Bullion, Defendant (United States District Court, S.D. Florida. Robert SHAVE, Plaintiff, v. STANFORD FINANCIAL GROUP, INC, Defendant. No. 07-60749 CIV-Cooke. May 29, 2007).

Shave accuses the company of the following:
A. Not clearly communicating and explaining the risks involved with investing in numismatic coins;
B. Not responding to Mr. Shave's concerns regarding the safety of his investments; and
C. Lying about transactions, inventories and values of the numismatic coins.

Shave, who had invested before in bullion coins (which are "pegged" to the price of gold), but had no experience in investing in rare coins (less stable investments) contacted Stanford after hearing an enticing radio advertisement for their services. The Stanford investment advisor represented that Shave would make huge profits from investing in numismatic coins "by claiming that the coins would rise exponentially in value as compared to gold bullion coins, which are pegged to the price of gold itself(Ibid)." Shave claims that the defendant failed "to disclose that the market for numismatic coins is highly subjective, highly illiquid and had numerous hidden costs and fees(Ibid)." Unaware of these risks, Shave proceeded to entrust more and more of his money with his Stanford advisors. The court complaint continues stating,

The plaintiff's risk was huge since not only was there inherent undisclosed risk involved in trading numismatic coins, but more significantly, Stanford intended to trade plaintiff's money for its own benefit by charging outrageously high commissions and maintaining short hold periods. Using this strategy, defendant reaped tremendous profits by capturing the spread between the wholesale price used to (purchase or) repurchase the coins from Plaintiff and the retail price it charged to (sell or) resell the coins to their other customers. Hence, Stanford would make trades solely for the profits it could earn at Shave's expense. Accordingly, Stanford's representations regarding the safety and liquidity were more then mere puffery and were actually outright false and deceptive(Ibid).

From 2004 to 2006 Shave lost money on 40 out of the 41 transactions conducted by Stanford. He cites a breach of fiduciary trust "as the losses suffered were a direct and proximate result of following defendant's negligent and/or fraudulent investment advice(Ibid)." In conclusion, Shave,

Demands a trial by jury and a resulting judgment against the Defendant, for statutory damages pursuant to Florida Statutes, section 415.1111, and compensatory damages in an amount in excess of $75,000.00, plus interest and costs, punitive damages, reasonable attorneys' fees and for such other and further relief as the Court deems just and proper(Ibid).

If you or anyone you know have purchased rare coins from Stanford, please contact us !

Stanford Coins and Bullion

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