SAN GABRIEL VALLEY : Commodities Firms Closed in Illegal Investments

Officials announced actions this week taken to shut down three commodities firms, including one in San Gabriel, which allegedly sold more than $10 million in illegal investments to primarily Asian American investors.

Lida International Financial Data of San Gabriel, Worth Financial Data of San Francisco, and their parent company, Topworth International of Hong Kong, are accused of the illegal sale of gold, silver and foreign currency.

At a Los Angeles news conference, California Commissioner of Corporations Gary Mendoza said most of the investors were from the Los Angeles and San Francisco areas.

Mendoza said his office and the U.S. Commodity Futures Trading Commission are taking both civil and criminal action against the firms.

“This is a classic example of affinity group fraud,” he said, “that is, when members of an ethnic or other minority group prey upon members of their own community.”

“They use the strength of that community affiliation as a selling point, and encourage people to join their organizations and sell further investments to friends and family,” he said.

In a joint filing in federal court, the Department of Corporations and CFTC brought action against the firms for alleged violations of the federal Commodity Exchange Act and the California Commodity Law of 1990, he said.