The City Attorney did not obtain any contested judgment against Goldline nor was there any finding of liability or wrongdoing by Goldline. To the contrary, Goldline entered into a settlement with the City Attorney and the parties jointly agreed to certain conditions of that settlement which was submitted and approved by a court. The parties expressly agreed that “This Judgment is not to be construed as an admission of liability by any party or a finding of liability against any party. Goldline expressly denies all allegations set forth in the Complaint.” (Emphasis added.)
Goldline’s disclosures and transparency represented the best in the industry prior to the settlement with Santa Monica. Goldline offered among the most comprehensive written disclosures including complete information regarding Goldline’s sales staff, the risks of investing in precious metals, and Goldline’s pricing policies.
Throughout the period investigated by Santa Monica, Goldline’s pricing was transparent to its customers. Every client reviewed and signed Goldline’s Account and Storage Agreement as well as reviewed its large type risk disclosure booklet that clearly spelled out Goldline’s pricing. The company also provided an easy to understand mathematical example to ensure the client understood both Goldline’s selling price and its buyback price. Goldline explained its pricing again in a written trade confirmation that was sent to every client.
Every client identified in the settlement who is eligible for a refund in exchange for a return of their precious metals had read and signed Goldline’s agreement and risk disclosure materials regarding pricing.
Goldline’s commissioned sales staff were trained and monitored to follow Goldline’s compliance program, a program designed by experienced consumer protection, telemarketing and precious metals professionals.
There was no award of damages as incorrectly suggested by the City Attorney’s Office nor has there been any finding that any client was defrauded by the company. Goldline agreed to allow 43 clients, comprising a scant 1/10th of 1% of its clients for the relevant period, to return their precious metals for a refund. At this time, no one can say how many of these clients will choose to return their precious metals. If the clients ask for a refund, the company will receive in exchange the original precious metals which are valued in the millions of dollars.
The City Attorney’s office mischaracterized its investigation. Initially, only the City Attorney and the Los Angeles District Attorney were involved in a civil investigation (click here for more details). However, the Los Angeles District Attorney’s office declined to participate in any criminal or civil prosecution of Goldline.
The City Attorney falsely characterized Goldline’s information regarding the 1933 Executive Order and the government ban on the private ownership of gold for 40 years. This topic, which is widely discussed in the precious metals industry and by the media, was truthfully presented and included clear disclosures to ensure Goldline customers understood the historic context of the government ban. The City Attorney’s Office agreed that this truthful discussion is appropriate and that Goldline may continue to discuss the 1933 Executive Order and the 40 year ban on the private ownership of gold with its clients.
The City Attorney’s claim that such discussions are now improper or prohibited is untrue and represents a serious attack upon constitutionally protected free speech. It is a protected and historically grounded opinion that the government can recall gold held by its citizens. The Executive Order of 1933 called for the immediate return of certain quantities of gold, including bullion, upon penalty of fine or imprisonment. The Order specifically carved out from its scope “gold coins having a recognized special value to collectors of rare and unusual coins” — a description that was applied by the Treasury Department to exempt a number of the popular coins which Goldline sells.
It is further truthful and constitutionally protected speech to state that the United States government retains the authority to recall gold from its citizens during times of war. This fact is part of the City Attorney’s approved statement on this issue. Independent commentators, financial analysts, and public officials continue to offer opinions that government has the authority to recall gold to date. Any personal opinion held by the Santa Monica City Attorney as to the likelihood that the government will in the future once again act as it did in 1933 does not justify the issuance of a press release attacking Goldline based on facts that are unproven, unsupported, and false.
The City Attorney’s assertion that Goldline sold “overpriced” coins or that it charged a mark-up of over 50% over the fair market value is patently false. It is equally false to say that the company improperly concealed the mark-up of its products.
The City Attorney improperly refers to claims from former employees without disclosing that many of these employees work for direct competitors who offer none of the transparency, compliance or training provided by Goldline.
Goldline is proud of its role as the industry leader in customer service, compliance and transparency. This settlement only further demonstrates the company’s commitment and challenges every competitor to meet these standards.
About Goldline International
Goldline International is one of the largest companies providing physical precious metals to collectors and investors in the United States. Founded in 1960, Goldline is headquartered in Santa Monica, CA with over 400 employees and annual sales exceeding $500 million. In 2011, Goldline was recognized by Inc. Magazine as the 6th fastest growing company among private companies with more than $500 million in annual revenues and The Los Angeles Business Journal as the 28th largest private company in Los Angeles. For more information about the company, visit www.goldline.com.
