Dallas, TX — A Texas federal judge has denied summary judgment motions from both the Commodity Futures Trading Commission (CFTC) and the individual defendants in a high-profile fraud lawsuit involving more than $185 million in alleged investor losses. The ruling sets the stage for a potential trial in what has been described as one of the largest precious metals fraud cases in recent years.
U.S. District Judge Brantley Starr issued the order on Monday, rejecting cross-motions for summary judgment filed by the CFTC and Los Angeles-based precious metals dealers Lucas Asher and Simon Batashvili. The lawsuit, initially filed in 2020 by the CFTC along with 30 states, accuses Asher and Batashvili of defrauding over 1,600 mostly elderly investors nationwide by selling precious metal bullion at grossly inflated prices.
In their summary judgment motion, the defendants argued that the gold and silver bullion they sold do not qualify as commodities under the Commodities Exchange Act (CEA), and even if they do, the so-called “actual delivery exception” exempts them from CFTC regulation. Judge Starr noted the complexity of the issue, explaining that the CEA’s definition of commodities primarily covers agricultural products, while precious metals fall into a legally ambiguous category that requires further clarification.
The court highlighted that key legal questions surrounding the CFTC’s jurisdiction under Section 19 of the CEA remain unresolved due to the lack of briefing by the parties, making summary judgment inappropriate at this stage. The judge further emphasized uncertainty about whether transactions were offered on a leveraged or margined basis, which is critical to applying the “actual delivery exception.”
Moreover, the court declined to dismiss state law claims alleging fraud and improper investment advice, indicating that these matters will proceed to trial for a jury to determine the facts.
According to the CFTC’s complaint, starting in 2017, Asher and Batashvili encouraged investors to buy precious metals at prices between 100% and 300% above market value while falsely claiming association with a conservative media personality who had issued a cease-and-desist order against them.
This enforcement action marked the largest joint filing in CFTC history with state regulators and stemmed from a 2018 information-sharing agreement between the CFTC and the North American Securities Administrators Association.
Counsel for the defendants declined comment. The CFTC did not immediately respond to requests for comment.
