gold scams

Gold ScamsThree Types

W W W. G O L D R AT E F O R T O D AY. O R G

http://www.goldratefortoday.org/

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Gold scams are 1. Fraud

2. Misrepresentation 3. Market manipulation

To know the typical gold scams is the first step to avert them

GOLD SCAMS: THREE TYPES

W W W. G O L D R AT E F O R TO D AY. O R G


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First, Fraud1. Buying scrap gold (old

jewellery) for only half or less of the gold price can be considered as fraud

2. Typically Businessmen having this in mind announce their scrap gold sale in local radio

stations and rent a hotel lobby on a Saturday morning for this

purpose




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1. Another way of fraud is selling gold numismatic coins at prices

which highly surpass the material and collector’s value

2. The victims are often old people who can easily be tricked into

this business deal




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1. From time to time Nigeria Emails arrive in the inbox

2. Here, a businessman with connections to Nigerian gold mine tries to sell gold by the

kilo for prices that are far lower than the current gold rate

3. Of course, this was a legal business and gold export

licenses did exist




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1. The only catch, for the transaction it is necessary to fly

to Nigeria

2. (It is up to the email recipient to decide whether this is a

genuine business opportunity)




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Second, Misrepresentation

1. Imagine, a bank sells gold which the buyer never

physically receives, but which is stored in the bank’s vault

2. The bank further charges the gold owner storage fees

3. So fine so good




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1. Let’s now assume the owner of the precious metal insists on

seeing the gold

2. Now it is discovered that the bank never actually possessed

the gold

3. How would one call the bank asking for storage fees of something that was never

stored?




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1. Do you think this incident is highly hypothetical, or would

only happen in dodgy countries?




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1. Well, this allegedly happened at the bank Morgan Stanley

2. In 2005 a class-action suit was filed against Morgan Stanley




1111

1. The bank was accused of selling between 1986 and 2005 physical gold and other

precious metal to clients who paid fees for storage at this

bank

2. But allegedly Morgan Stanley either made no or a different investment on behalf of its

clients




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1. The result was that Morgan Stanley would pay US$ 4.4m to

settle this class action suit

2. "While we deny the allegations, we settled the case to avoid the

cost and distraction of continued litigation," Morgan Stanley said in a statement




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Third, Market Manipulation

1. What is market manipulation?

2. These are actions that try to distort the market equilibrium

out.




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1. For example, in the beginning of 2007 there was an incident regarding naked short-selling

among stocks of smaller mining companies

2. Here, shares were massively sold to force the price of the

shares down




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1. Also, governments could be labelled as market manipulators if the restrict the free trade of

gold

2. Vietnam is such as case

3. In the beginning of 2011 it was reported that the government had plans to ban the trade of gold bars on the free market




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