News

March 1992

T.G. Morgan, Inc. and its president, Michael W. Blodgett, have agreed to turn over several million dollars in assets to settle Federal Trade Commission charges that they falsely represented rare coins they sold to consumers to be good investments and an effective means of preserving wealth in a liquid form.

The settlement also prohibits the defendants from falsely representing any material fact about coins or any other investments they sell, and requires them to make certain disclosures to future customers. Further, under the consent judgment, many of the coins recovered from the defendants will be returned to T.G. Morgan's customers. The remainder of the assets will be liquidated and used to set up a fund for providing customer refunds.

Specifically, the consent judgment prohibits T.G. Morgan and Michael Blodgett from falsely representing:

-- that purchasing their coins is an effective means of preserving wealth or holding wealth in a form that can be easily liquidated;
-- the safety of investing in their coins;
-- the relationship between the prices the defendants ask, quote or charge for their coins and the coins' market value or the prices the defendants paid;
-- the current or past market values of their coins or any other investment they sell;
-- the past or likely future financial gain that will result from purchasing an investment from the defendants, or the nature or quality of any service the defendants provide in connection with such investments; or
-- any fact material to a consumer's decision to purchase their coins or any other investments they offer.

In addition, the settlement requires the defendants to disclose to future customers that the investment value of rare coins depends in large part on the prices consumers pay, and that it is strongly recommended that buyers consult an independent coin expert to determine a coin's current market value and liquidity when buying a coin as an investment.

The amount of redress distributed to T.G. Morgan customers as a result of the settlement depends on how much of the judgment is actually collected.

Source: http://www.crimes-of-persuasion.com/Crimes/Telemarketing/Outbound/Major/Investments/rare_items.htm