CFTC News Release 4416-00

For Release July 5, 2000

**CFTC ISSUES CONSUMER ADVISORY ALERTING    PUBLIC TO BE WARY OF CLAIMS OF EASY PROFIT AND LOW RISK FROM BUYING    PRECIOUS METALS AND OTHER COMMODITIES**

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced    today that it issued a **Consumer Advisory** warning the public to be wary of companies that    sell investments in precious metals -- such as gold and other commodities    -- based on sales pitches claiming that customers can make a lot of money,    with little risk, by purchasing metal through a financing agreement. These    companies may be offering opportunities to speculate on the price movement    of precious metals or other commodities without actually taking delivery of    the commodity.

The CFTC issued this **Advisory** after filing a number of    enforcement actions over the past several years against companies suspected    of illegally or fraudulently selling precious metals commodity futures    contracts or options.

Phyllis Cela, Acting Director of the CFTC�s Division of    Enforcement, commented:

This advisory is another step in the CFTC�s on-going program to      educate the public about fraudulent "get rich quick" telemarketing      schemes involving commodity futures contracts and options. Here, we are      warning the public to look closely at companies touting great profits and      little risks in investments involving precious metals and other      commodities, particularly where the companies pretend to provide or      arrange financing and claim to be storing commodities on the      customer�s behalf. As our recent enforcement actions reveal, such      claims of great profit and low risk are often false.

The **Advisory** specifically warns that companies -- soliciting    through radio, television and internet advertisements, informercials, and    telephone "cold calls" -- often promise quick riches with low risk, ask    customers to pay only a small percentage of the total purchase price, claim    that they (or another company) will purchase and store the metal, and    pretend to arrange financing for the customer supposedly to allow the    customers to obtain a larger profit by controlling a larger amount of metal    with their relatively small downpayment. Often such companies will claim to    be dealing with foreign storage or banking entities and will charge phony    storage and interest fees.

The **Advisory** provides a list of common false claims made or    typical phony fees charged by such companies and other warning signs of    commodity "come-ons." The **Advisory** also identifies sources of    information concerning companies and sales persons, general information    about trading commodity futures contracts and options on commodity futures    contracts and other consumer advisorys issued by the CFTC. As the **Advisory** cautions, if in doubt, don�t invest.

The CFTC also announced today that (1) on June 28, 2000, it filed an    enforcement action and obtained emergency relief against **National    Bullion and Coin, Inc**. **(NBC),** and others, alleging a fraudulent    nationwide telemarketing scheme to solicit customers to purchase illegal    precious metals futures contracts (seeCFTC    News Release 4415-00, July 5, 2000) and (2) on June 20, 2000, in    another CFTC enforcement action alleging an $18 million precious metals    commodity fraud, a federal district court for the Western District of North    Carolina issued a preliminary injunction against defendants **IBS,    Inc.;****IMC Trading, Inc.;****Joe Miller Company****d/b/a IMC    Trading;****Mazuma Trading Group, Inc. d/b/a Pinpoint Marketing,    Ltd.;****Alan Stein;****Joseph Finateri;** and **Michael    Temple**, barring them from soliciting customers or accepting funds for    commodities trading (see CFTC News Release    4417-00, July 5, 2000).