Michigan Attorney General Dana Nessel has announced that investors who purchased retail precious metals from Lear Capital will receive compensation as a part of Lear’s bankruptcy plan. Security regulators in various states 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 who 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 bought 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.
“Investors who were misled by Lear Capital’s deceptive practices deserve to be refunded even in light of the company’s bankruptcy,” Nessel said. “Michigan residents who wanted to provide for their future should be able to recoup some of their invested funds as the company is finally held accountable for its deception.”
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.
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