BullionDirect goes bankrupt

[Garry]

Another one. Shades of Tulving? Anyone have details on this one?

 

[Penn]

holy cow~~~!!!

 

[ancona]

Not good!

 

[mmerlinn]

Another one. Shades of Tulving? Anyone have details on this one?

That is what happens when margins are too thin in volatile markets. One major swing against you and sooner or later you will be bankrupt. Once underwater it is almost impossible to recover.

That is the major reason I don't buy and sell catalytic converters. Platinum often moves 5% or more in one day, but the converter industry works on a 5% or less margin - a disaster waiting to happen.

 

[ancona]

These guys supposedly had an allocated "storage" program thing going on as well. Now, all those people who thought they had gold are screwed.

If you can't hold it, you don't own it.

 

[ancona]

I went to their site and I'm right. They had a deal called the Nucleo Exchange. You would "buy gold/silver, they would "allocate it" and hold it for you in a "secure vault" and if/when you wanted to take possession, you simply called, pay a handling and shipping fee and voila, it was sent to you in a secure, insured package. Easy, right? Turns out that just like any other bullshit scam out there, it's all about the people behind the curtain and those people are evil. I suspect it's absolutely not the bullion direct folks in the least, but the people behind the unreal leverage on the paper crimes at Comex ET. AL writ large.

 

[pmbug]

Yeah, I posted a note about this a couple of weeks ago:

http://www.pmbug.com/forum/f8/bullion-direct-3500/

 

[11C1P]

Every time I place an order online, I consider it an X dollar amount gamble until I have the precious in my hands. Unless I have possession of it, it's even more worthless than paper money.

 

[Jay]

Every time I place an order online, I consider it an X dollar amount gamble until I have the precious in my hands. Unless I have possession of it, it's even more worthless than paper money.

EXACTLY my sentiments.

 

[Penn]

I dealt w bullion direct a few times. I had let them hold mine for a while too.

I would have guessed apmex to go sooner then BD.

crazy markets

 

[DoChenRollingBearing]

...

One of FOFOA's followers (I forget which) wrote a comment at Zero Hedge saying that additional bankruptcies among gold sellers would likely continue. Penn got it right: holy cow!

This *may* mean that a physical shortage is creeping up upon us. Declining paper price for gold, yet shortage of the real thing, is one of FOFOA's main predictions.

I may have STOPPED buying gold (at my wife's, erm "encouragement"), but I now have enough to weather most storms I visualize ahead. You never know though.

* * *

Ah, yeah, NO allocated storage looks smart. Take delivery.

Yes as well to the acknowledgement of extra risks now by ordering on-line, etc.

 

[pmbug]

...
Emails obtained by the American-Statesman show state and local prosecutors have met to discuss the company. Leavitt confirmed the U.S. attorney’s office also has begun investigating Bullion Direct.
...
Bullion Direct filed for bankruptcy protection on July 20, several days after the company abruptly shuttered its operations and let go its dozen or so employees. The company’s new lawyer, Joe Martinec, has hired a local turn-around specialist to try to squeeze whatever value remains out of it.

Several weeks into the job, he has described the company’s finances as a mess. Bullion Direct hadn’t filed a tax return since 2010. What little has been unearthed suggests it was losing money almost from the day it opened its doors. Records also indicate McAllister paid himself hundreds of thousands of dollars in annual compensation.
...
Beneath the surface, however, financial documents from Bullion Direct’s bankruptcy depict a startlingly different picture. James Hoeffner, an Austin attorney representing a Florida customer missing an estimated $250,000 in cash and metal from the company’s vault, said Bullion Direct filed only a single income tax return, in 2010, covering the previous decade.

It showed the company lost money for all but two of those years. By 2009, the documents show, the company was carrying $17 million in losses — not counting the tens of millions of dollars’ worth in eventually missing money and metal. Records also show McAllister had hired a bankruptcy attorney in 2012, but never filed.

At the same time, he paid himself as much as $365,000 annually, and borrowed an additional half-million dollars from the company, according to the documents.

Officials said they are still trying to reconstruct Bullion Direct’s finances for the past five years. ...

http://www.mystatesman.com/news/news/local/downtown-austin-vault-of-precious-metals-turns-up-/nnYS2/