Chicken Soup For the Soul of the Rare Coin Investor

Chicken Soup For the Soul of the Rare Coin Investor

If you have been considering investing in silver coins, and are looking for some form of reassurance that the evil of this world goes punished and the good of this world goes rewarded, then this article is for you. The December 17th, 1974 edition of the Los Angeles Times reports an incident that will restore your belief that a silver coin dealer remains well within reach of wrathful Uncle Sam.

Staff Writer Myrna Oliver reported that the Superior Court issued an order to a silver coin dealer known as the United States Precious Metal Exchange, Inc. to compensate their customers for money they lost as a result of unclear and outright deceptive claims about the company made regarding its own capacities.

The company's board chairmen, Sheldon Katz and Marx Salow were sentenced to pay a total of $5,000 in court fees on top of a $240,000 bill to a total of 130 of their customers in the form of monthly installments monitored by a court-appointed accountant.

In addition to this stiff fee, the settlement will bar the company from making a rather long list of false claims

  1. They can no longer hold coins for customers when they in fact do not.
  2. The company may no longer lie and say they have purchased a commodity when in fact they purchased a futures contract on behalf of their clients.
  3. They may no longer call silver coins "outstanding investments" without simultaneously explaining to them how much silver has been worn off the coins through circulation, in addition to naming the cost of melting the copper inside of the coins in order to separate it from the silver in which it is sandwiched.
  4. They no longer can market themselves as an "exchange" unless they actually facilitate trading between parties unaffiliated with their business.

The original lawsuit brought against the company accused the company of taking money from customers under the auspice of purchasing coins from them, but then investing this money in futures contracts by proxy.

Allegedly, the company made several faulty investments in such a manner with the money of their customers and filed for "receivership" in January of 1974. Receivership is similar to bankruptcy, except it transfers ownership of the business in question to an individual appointed by law.

Though they agreed to settle, at no point did the dealers admit to any wrong doing to any wrong doing on their behalf.