CFTC, 30 State Regulators Obtain Over $51 Million in Sanctions, Restitution for Victims in California Precious Metals Fraud
Executive Summary
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. #
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, and penalty calculations up to triple gains or $227,220 per violation, offset by parallel SEC sanctions ($25.6 million disgorgement and penalty). Courts emphasized investor reliance via widespread dissemination of false info. #
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
- File suspicious activity reports (SARs) promptly for similar schemes and retain records for 5+ years
Key Dates
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 rising retail commodity scams; firms in metals or alternatives face audit risks if sales practices mir
Who is Affected
Summary
The CFTC today announced the U.S. District Court for the Central District of California entered a final judgement against Safeguard Metals LLC and Jeffrey Ikahn (aka Jeffrey Santulan and Jeffrey Hill) ordering them to pay $25.6 million in restitution to victims and a $25.6 million civil monetary penalty for operating a nationwide, precious metals fraud. Released: 11/20/2025