Governor Josh Green, M.D.

HONOLULU – The Department of Commerce and Consumer Affairs (DCCA), through its Securities Enforcement Branch (SEB), in partnership with the federal Commodity Futures Trading Commission (CFTC) and the California Department of Financial Protection and Innovation (DFPI), filed a federal lawsuit in Los Angeles against Southern California-based precious metals dealer, Red Rock Secured, LLC (Red Rock), along with its principal and owner, Shade Johnson-Kelly, a/k/a Sean Kelly, and sales agent, Anthony Spencer.

The defendants are charged with fraudulently soliciting an estimated $61.8 million in funds from more than 950 customers nationwide and are alleged to have defrauded hundreds of customers into transferring funds in their tax-deferred retirement accounts, 401(k) plans, and the U.S. Government Thrift Savings Plan, and use those funds to purchase precious metals from Red Rock through self-directed IRAs. The alleged scheme, which includes approximately $34.4 million in markups alone, took place between at least November 2019 through at least February 2022.

Because Red Rock charged exorbitant markups and severely inflated the price of the precious metals sold, customers allegedly suffered an immediate loss to their investments. According to the complaint, Red Rock charged an average markup ranging from approximately 100% to 130% on the precious metals.  Red Rock is alleged to have misled its customers into believing that Red Rock’s markup on the precious metals would fall between either 4% to 29% or, in some instances, 1% to 5%.

The complaint seeks a permanent injunction to stop the deceptive and fraudulent practices, disgorgement, full restitution, rescission, and civil monetary penalties. The Securities and Exchange Commission (SEC) has filed a civil enforcement action against the same defendants and another individual alleging violations of federal Securities Laws.

“Protecting investors is a core part of the Securities Enforcement Branch’s mission. As this action demonstrates, we are committed to holding bad actors accountable for their actions.” said Acting Commissioner of Securities Ty Nohara. “We thank our partner agencies—CFTC, SEC and DFPI—for their diligence and coordinated efforts in this action.”

Investors are encouraged to come forward if they suspect they have been targeted by similar precious metals investment schemes. Please contact the DCCA’s Securities Enforcement Branch at (808) 586-2740 or via electronic mail at [email protected].

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Media Contact:

William Nhieu

Communications Officer

Department of Commerce and Consumer Affairs

Email: [email protected]

Office: (808) 586-7582