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 !