Securities News Releases

Wednesday, August 25, 2010
Contact: Laura Egerdal, (573) 526-0949

Carnahan Investigates Silver Scheme That May be Costing Missourians Thousands

Jefferson City, MO – Missouri Secretary of State Robin Carnahan is urging Missourians to use extreme caution when considering investments in gold, silver or other precious metals. A cease and desist order issued today charges Florida-based Global Bullion Exchange, LCC, with defrauding Missouri investors, and names several other Florida-based companies and individuals in connection with the scheme.

According to the order, at least three Missourians from Moberly, Lebanon, and St. Charles lost a total of nearly $100,000 after investing in silver through the Global Bullion Exchange. In separate incidents, the investors received unsolicited calls from the company promoting silver as a “great opportunity” and “a solid investment with good returns.” After turning over thousands of dollars, the investors each received periodic account statements, but reported that they were confusing and missing several important details. All three of the investors allegedly had trouble contacting Global Bullion to clarify the statements or get more information about their investments, even after repeated attempts.

“Silver and gold may sound like lucrative investment opportunities, but remember; if it sounds too good to be true, it probably is,” Carnahan said, “If you don't understand how an investment works, or something on your statement doesn't make sense, make sure you ask questions and call my office to check it out.”

The silver bullion investments were allegedly offered through margin accounts, a practice prohibited by Missouri commodities laws. Investors were told that they could make substantial profits through leverage, or borrowing money to increase the returns on their investment. However, Global Bullion Exchange allegedly didn't inform the investors of the risks involved with these types of accounts, or fully explain the significant interest charges and “management fees” that investors would incur. The order indicates that in many cases, the price of silver would have to rise nearly 40% for the investors to break even.

Global Bullion Exchange has been subject to orders in other states. California and Maryland have both issued cease and desist orders against the company, and Jamie Campany, who ran several of the companies associated with Global Bullion, was the subject of a 1999 Complaint by the National Futures Association for “deceptive and misleading sales solicitations,” and filed Chapter 7 bankruptcy in 2001. Brian Ekasala, who sold some of the silver investments to Missourians, is also subject to a cease and desist order issued by officials in Carnahan's office in a separate matter.

The respondents face hundreds of thousands of dollars in civil penalties. They have 30 days to request a hearing and contest this matter.

For more information regarding investments and fraud protection, or for information regarding a company or representative, call the toll free Investor Protection Hotline at 1-800-721-7996 or visit the Secretary of State's online Investor Protection Center at www.MissouriSafeSavings.com.

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To find out more about Missouri's Secretary of State's office, visit www.sos.mo.gov

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