Mississippi Secretary of State Michael Watson’s Office has announced a coordinated settlement of claims with precious metals dealer GSI Exchange.
The settlement permits 11 clients located in Mississippi to elect to receive a refund of up to $659,000 in principal previously paid to GSI Exchange. Clients electing to receive the funds will be required to return precious metals to the company, essentially unwinding their transactions.
The settlement is the result of the coordinated work of state securities regulators from Alabama, Arkansas, and Texas.
Alabama’s Securities Commission and the Texas State Securities Board filed administrative enforcement actions in July 2021, and the Arkansas Securities Department filed a third case in February 2022.
The three parties generally alleged that GSI Exchange was acting as an unregistered investment adviser and not disclosing information material to the “spread,” or markup, paid by clients.
The agencies began negotiating a resolution of claims to benefit investors located in the 44 states where GSI Exchange sold precious metals.
As part of the resolution, some state securities regulators have elected to enter a settlement with the company to require refund principal to clients in their respective states.
“In too many cases, clients pay a hefty price, but this case is different. Today’s settlement financially benefits clients by requiring GSI Exchange to return money to Mississippians who elect to participate,” Watson said. “Yet again, our Securities Division continues to ensure the hard-earned money of our citizens is protected.”
Mississippians who purchased precious metals prior to July 22, 2021, are eligible for refunds and will receive instructions and other relevant information.