Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—S.D.N.Y.: $6.9M consent order effected in ‘Silver Lease’ matter, (Sep 17, 2025)

By Rebecca E. Hoffman, J.D.

The defendants misappropriated funds and precious metals from investors and provided false information to insurers to make the program appear to have backing.

The Southern District of New York Sept. 12 entered an order permanently enjoining Ross Baldwin and National Coin Broker, Inc. (NCB) from any future commodities trading, and imposing significant financial penalties, after finding that they schemed investors out of millions through a program purporting to lease precious metals—which defendants claimed would be securely stored and insured—and pay dividends or “lease payments” (CFTC v. Baldwin, No. 1:21-cv-05707 (S.D.N.Y. Sept. 12, 2025)).

Baldwin was the owner and sole officer of NCB. The court entered a default judgment in April against the other parties involved, Robert Jeffrey Johnson, Kathleen Hook, Precious Commodities, Inc., and NCB Wholesale Co., imposing a similar injunction and restitution liability. Baldwin, Johnson, and Hook have also pleaded guilty to criminal charges including wire fraud.

The defendants operated a fraudulent scheme from 2014 to 2019 that promised investors returns on silver the defendants leased, the court explained. An investor could participate by providing their own silver or by paying funds into the program, used to purchase silver on the investor’s behalf. They were told that their investments were insured and that the silver would be stored in a vault.

False, fraudulent, fiction. The defendants did not store any silver, maintain any vaults, or operate any legitimate leasing program. Instead, they used investor funds to enrich themselves and others associated with them while misleading investors with fake insurance policies and false statements about secure storage and investment returns. “Baldwin’s statements gave the false impression that he personally operated a legitimate business” and “used investors’ silver to fulfill large orders, and that he then replaced that metal,” the court said. “In sharp contrast to that picture, however, Baldwin stated to Commission staff during his investigate[sic] testimony, under penalty of perjury, that he was not involved in the borrowing or replacement of investors’ silver and had never actually even seen any of the metal supposedly being stored on behalf of investors.”

The court also noted that “one of [Baldwin’s] co-defendants” had been convicted of bank fraud and that his failure to disclose this was another of Baldwin’s material misrepresentations to potential investors.

$6.9M recompense. In addition to the permanent ban on trading and solicitation within commodities markets, the court ordered the defendants to pay full restitution to victims of the scheme. The National Futures Association was appointed as the monitor to oversee restitution payments and ensure proper distribution to harmed investors. The order also ensures that restitution paid in a parallel criminal case will be credited against this obligation.

The CFTC in its press release said that it has issued a Precious Metals Fraud Advisory to instruct the public on how to recognize the persuasion tactics used in this type of scam. The Commission strongly encourages checking the offeror’s registration and background before investing.

The case is No. 1:21-cv-05707.

Judge: Liman, L.

Attorneys: Patrick Francis Daly for the CFTC. Steven E. Rosenfeld (Law Offices of Steven E. Rosenfeld, PC) for Ross Baldwin.

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