LI telemarketer sanctioned over precious metals trades

Timothy Massad, chairman of the Commodity Futures Trading

Timothy Massad, chairman of the Commodity Futures Trading Commission, in the State Dining Room of the White House in Washington on Nov. 12, 2013. The federal agency issued an order filing and settling charges against a Holbrook-based telemarketing firm and its owners for violating federal law. Photo Credit: AP / Evan Vucci

advertisement | advertise on newsday

The U.S. Commodity Futures Trading Commission ordered a Long Island company and its two owners to pay more than $2.97 million in restitution for allegedly participating in illegal commodity transactions involving precious metals.

The federal agency issued an order filing and settling charges against Holbrook-based telemarketing firm S.J. Woods Inc. and its owners, Peter Blanco, 45, of Brightwaters, and Paul Proscia, 44, of Sayville, for violating a federal law prohibiting off-exchange financed transactions in precious metals with individual investors.

Blanco and Proscia settled without admitting or denying the findings. Both were permanently banned from trading commodities. Neither S.J. Woods, formed in October 2010, nor Proscia or Blanco were registered with the commission, the order states. Attempts to reach Blanco and Proscia were not successful.

From July 2011 through February 2013, S.J. Woods solicited customers, generally by telephone, to invest in precious metals, such as gold, silver and platinum. Customers paid as little as 25 percent of the purchase price, and the company purportedly financed the rest, while charging customers interest on the loan, as well as a service fee and commission, the order found.

Woods received commissions and fees totaling more than $2.97 million for the financed transactions, but did not purchase, sell or store metals, or deliver them to customers, according to the order.

The order said many of Woods' customers were "unsophisticated, individual investors" who were not actually eligible for the transactions they made.

advertisement | advertise on newsday

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expanded the CFTC's jurisdiction over the kinds of transactions discussed in the order.

According to S.J. Woods' website, the company closed following a ruling by a federal judge in South Florida in February 2013. "This decision [to close] is not final and it remains unclear who regulates the precious metals industry and how those within the industry are required to conduct their business activities," the website said.

The latest LI business news in your inbox daily. Get the Biz Briefing newsletter!

Comments now uses Facebook for our comment boards. Please read our guidelines and connect your Facebook account to comment.

You also may be interested in: