Equity Trust IRA lawsuit (2012)

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au

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Posts: 34

Posted 1440727829	Reply with quote #1

Has anyone heard about this? Wondering what the status of the lawsuits is now? http://noteinvestor.com/buy-notes/self-directed-ira-lawsuit/ "Two custodians of self-directed IRAs were sued in U.S. District Court in Los Angeles on Monday by three investors who allege that the companies knew the investors’ money had been stolen by scam artists yet sent them reports showing their nest eggs to be intact." -au
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robertmbeard

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Posted 1440734201	Reply with quote #2

au: I don't know about the specific lawsuit you reference. I do think that Bullion Direct stored bullion IRA crime victims should file a class action lawsuit against Equity Institutional for breach of fiduciary responsibility as IRA custodian. While they cannot be held liable for the investment value of bullion going up or down, they are responsible for ensuring that the bullion purchase/storage agent (Bullion Direct) is following the IRS rules and actually purchasing and storing bullion. I would expect they are responsible for an annual audit of Bullion Direct's storage vault, which would require "eyes on gold" in that audit. If they never viewed the vault contents to verify Bullion Direct was operating properly, how can Equity Institutional claim they upheld their fiduciary responsibility as the IRA account custodian? I'm not saying that Bullion Direct is not liable (they are...), but that Equity Institutional shares a significant chunk of liability here. They also are IRA crime victim's best hope of getting more significant partial restitution... That's just my 2 cent's worth...
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au

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Posted 1440734916	Reply with quote #3

Very good points. And Equity Trust has been charging maintenance fees on IRA accounts that likely all along were "insolvent" (I might add, many years of maintenance fees). -au
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nobody

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Posted 1440736279	Reply with quote #4

Not sure if it's the same case, but it looks like equity was spanked by the SEC about a month before BD went under. Probably unrelated, but that's a hell of a long C&D order, maybe there were implications I missed.
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JG

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Posted 1440761938	Reply with quote #5

Quote: Originally Posted by nobody Not sure if it's the same case, but it looks like equity was spanked by the SEC about a month before BD went under. Probably unrelated, but that's a hell of a long C&D order, maybe there were implications I missed. It says "Equity Trust has been a custodian for numerous investments that turned out to be Ponzi schemes or offering frauds." It also outlines internal controls, where some investments are scrutinized ("secondary reviews" in section 18) and can be placed on "hold" or "do not process" -- in which case they no longer send money to that type of investment. Given that Bullion Direct stopped IRAs sometime in 2011, I would not be surprised if Equity put Bullion Direct on a "hold" or "do not process" list -- if so, that sounds to me like damning evidence that they knew there were problems. If not on such a list, why would Bullion Direct have stopped IRAs? It also seems pretty clear that Equity never looked at a financial statement or tax return from Bullion Direct, which could have nipped this in the bud years ago.
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TerrenceJohns

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Posted 1492297044	Reply with quote #6

I believe the SEC Administrative action against Equity Trust was decided in favor of Equity Trust, which is pretty unusual. They certainly seem to have a lot of unhappy customers.
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