The CFTC, alongside 30 state regulators, secured a final judgment on November 20, 2025, against Safeguard Metals LLC and Jeffrey Ikahn, imposing $25.6 million in restitution to victims and a $25.6 million civil monetary penalty for a nationwide precious metals fraud scheme from October 2017 to July 2021 that defrauded over 450 elderly investors of more than $52 million. This enforcement action, resolving a February 2022 complaint, highlights coordinated federal-state-SEC efforts to combat commodity fraud and underscores personal liability for controlling persons under CEA Section 6(c)(1) and Regulation 180.1(a). It matters for compliance as it reinforces aggressive penalties for misrepresentations, overcharges, and targeting vulnerable populations, with offsets across parallel SEC proceedings.
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What Changed
This is an enforcement action, not a rulemaking, so there are no new regulatory changes or requirements. It reaffirms existing CEA prohibitions on fraud, including Section 6(c)(1), 7 U.S.C. § 9(1), and 17 C.F.R. § 180.1(a)(1)-(3), covering material misrepresentations, omissions, and deceptive schemes in precious metals sales. Key takeaways include joint-and-several liability for entities and controlling individuals (Ikahn held liable for not acting in good faith), systematic overcharges as fraud
What You Need To Do
- Conduct immediate fraud risk assessments on precious metals sales scripts, disclosures, and pricing markups to ensure no material misrepresentations or undisclosed overcharges
- Enhance senior investor protections, including suitability reviews, cooling-off periods, and training on vulnerable customer targeting bans
- Review controlling person policies for good faith oversight, documenting supervisory failures to avoid personal liability
- Audit parallel SEC/CFTC exposures in commodity-linked activities, preparing for offset calculations in multi-agency actions
- Update compliance manuals with this case as precedent for CEA fraud in physical commodities; monitor whistleblower notices for internal reporting incentives
Key Dates
February 1, 2022 - CFTC and states file initial complaint alleging fraud scheme.
May 5, 2022 - Plaintiffs file First Amended Complaint.
September 6, 2023 - Second Amended Complaint filed.
May 2, 2025 - Court enters SEC remedies judgment ($25.6M disgorgement/penalty, with offsets).
September 30, 2025 - Court issues Statement of Decision granting restitution ($25.6M) and civil penalty ($25.6M).
Compliance Impact
Urgency: Medium - This resolved enforcement sets precedent for precious metals fraud penalties but imposes no new rules or immediate deadlines beyond whistleblower claims (March 9, 2026). It matters due to escalating CFTC-state coordination, personal liability risks, and focus on elder fraud amid ri