Small Cap Coin Investors Sue State of Minnesota over Bullion Law

I received this press release yesterday, "embargoed" until today.
Small Business Investors, Hobbyists Sue Minnesota for Criminalizing Their Pursuits

Coin Collectors, Precious Metal Investors Fight MN Requirement to be Licensed and Bonded for Transactions Over $25K
Media contact: Tom Ciesielka, 312.422.1333, tc@tcpr.net

(September 22, 2020 – Minneapolis-Saint Paul, Minnesota) A group of small business investors and coin enthusiasts are suing the State of Minnesota in an effort to decriminalize their small cap alternative investment and collection pursuits. A September 22, 2020, online press conference addresses this lawsuit and the current Minnesota law that makes it illegal to purchase or sell a combined annual total of over $25,000 in gold, silver, or other precious metals, without registering as a dealer and posting a surety bond. The lawsuit, filed by attorney Erick Kaardal of Mohrman, Kaardal & Erickson, P.A., declares this “Bullion Dealer Law” to be unconstitutional and an impediment to interstate commerce.

The filing details how coin collectors are being discriminated against (there is no comparable burden on art, stamp, sports cards, or other collectors) and how out-of-state dealers have stopped doing business in Minnesota for fear of inducing ordinary investors into crimes. The law, referred to by Numismatic News as “draconian,” has made it common practice for bullion dealers to reject Minnesota clients. This Minnesota law has isolated the state’s bullion investors from the national and world bullion market.

WHO:

• Attorney Erick Kaardal, representing Tom Styczinski, d/b/a Tom “The Coin Guy,” LLC, Treasure Island Coins, Inc., and Numismatist United Legal Defense
• Tom Styczinski, operator of Tom “The Coin Guy,” LLC

The challenged law even forces its mandate on individuals who choose to convert a portion of individual retirement account fund investments to silver or gold. It also applies to any coin - even those issued by the United States Mint. Investors and collectors whose total annual transactions are between $25,000 and $200,000 are required to post a surety bond of about $25,000. Most ancient coin dealers will not sell their coins to Minnesotans anymore. The law, passed in 2013, also requires a license to buy and sell bullion products, even those that have no special numismatic value.

Kaardal observed, “Minnesota’s regulation of bullion investors shows the state Department of Commerce’s economic illiteracy. An ordinary investor with aggregate annual purchase and sales of $25,000 is a criminal if they don’t register and post a surety bond. The department has criminalized ordinary commerce. It’s no wonder that no one wants to do business in Minnesota. A better law could have been written by a fifth-grader.”

Coin collectors and traders, including mklaw.com.

Filing link here:
https://www.tcpr.net/wp-content/upl...nal-for-Filing-MN-Precious-Metals-9-22-20.pdf

 

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I don't know if this is related, but the U.S. Mint website now makes us check this box in order to make a purchase...

"By making an online purchase, you are agreeing to our Terms of Use, you are confirming that you are at least 18 years old, and you are opting-in to certain collections and uses of your personal data. For more information, including our authority to collect your data, please see our Privacy Policy."

Looking at the Privacy Policy, it talks about all this personal data collection and that it will only be shared with Law Enforcement. If the laws are going haywire, I'm not sure how much info I'm willing to share.

 

Tom is a good guy, been selling bullion here at local shows a long time. Its a travesty of a law. The Twin Cities Ancient coin club attempted to speak at the hearing on the law, and the DFL party, (Democrats), refused. They had no interest in our concerns, just wanted a campaign issue to run on. This was pushed through the system by the Attorney General, and all branches of government, (all DFL) quickly and without comments allowed.

Of course legimate collectors and dealers support the notion of stopping the sleezeballs cold calling grandmothers and ripping them off, and we had excellent ideas how to do so without destroying coin collecting in the state, but they refused to let us speak.

 

Gold Lives Matter !!

 

Maybe I'm missing something, don't all States in the US require a license to sell coins/PM's? My thoughts on this subject is that "Bullion Dealer Law" is likely there to sidetrack money laundering. In short, the government wants to be able to track large sales of PM's, I think that's done in other States as well, so what am I missing here?

 

I think it's posting the bond.....and that anybody who buys in volume (>$25K) has to register.

I don't want to have to register as a "dealer" if the price of gold hits $2,500 and I buy 10 coins.

 

No, its multifaceted. They have to POST a $25k bond to buy or sell any pm. Also, the law defines pm as any item with any amount of pm in it, and the seller legally has to tell the buyer how much pm is in it. How do you do that with an ancient coin, with no standardization? Only solution would be to melt it down. The law effectively outlawed selling ancient and medieval coins in this state.

 

That's very strange, I'm gonna have to read about all this as I don't get it at all! Any amount of PM, damn that's shameful!

 

So you're saying if a MN resident goes to a dealer both the seller (resident) and buyer (dealer) has to have a $25,000 bond ?

That's asinine. That's like having to register as a car dealership if you sell your used car.

 

Just the dealer has to post the bond.

WE were going to suggest a simple solution, if the customer goes tot he dealer you assume the customer knows what they are doing. If a dealer cold calls a person, THEN put all of the restrictions in place you want. It would save the hobby and still protect grandma.

 

Consider the 1794 Birch Cent. It has a silver plug in the center, worth about 11 cents right now.

 

Well, actually, check your state's laws about that. A lot people buy and sell used cars under the radar. They buy a car, and put in on their front lawn with a For Sale sign. Technically, some states take a dim view of that. Just sayin'... It could apply to buying and selling coins in your state.

 

Never heard of this but looking into it. yeah, it's a law saying if you are making annual aggregate bullion transactions of $25,000 or more, you need a dealer license basically.

the law is a bit too broad, it doesn't narrowly define "dealer" or "bullion" so in both cases it's general, like "anyone buying $25000 or more precious metals annually, or "any product containing a precious metal". basically making anyone trasacting in gold or silver a "bullion dealer", even thought they may be a gold or silver coin enthusiast, or rare coin dealer.

it was likely well intentioned to protect consumers from "fake" dealers claiming to have a business but they don't, (similar to unlicensed contractors) and selling bullion, real or otherwise, with no recourse if someone feels slighted because it's not a legitimate business.
but the way it was written doesn't do that.

Also, it appears this law was passed in 2013, and was never a real problem until someone started enforcing it strictly in 2019 and started mailing out violation letters around the state, and country. lol

 

They have actually tried to sue companies that sold to a MN resident in another state. But, the main objection from the ancient coin side is the definition of "bullion" and the requirement to state the exact amount of bullion in the coin. This is simply impossible for ancients, and effectively makes my hobby illegal in this state.

 

Yeah, but like I said, it's too general.

bullion: noun, "gold or silver in bulk before coining, or valued by weight."
if they had simply called it "precious metal coins or objects, bought or sold at precious metal prices" or something along these lines, it would exclude collectible coins, or ancients or most any of that jazz and just apply to "bullion" as a metals investment purchase or sale and collectors would be left alone.

And if they narrowed it down to Dealers requiring a business license in that county or state, instead off generalizing ti to any tom dick or harry that buys or sells $25K in metals a year it wouldn't affect collectors, or even accumulators or investors, just dealers as a business.

I'm aware they tried to go after any and all violators, but like I mentioned this laws been there since 2013, it's only since 2019 since people got bent out of shape over it, and I guarantee you, somewhere in MN there's a person taking their job way too seriously.

 

Seems like the intent of the law in MN was to go after telemarketers. Or those using brokerage monies.

Stick to those.

 

"Johns Hopkins retained the collection for many years and the coins were studied by many numismatic luminaries who visited the university, including Walter Breen. Numismatists Carl Carlson and Susan Tripp acted as curators for the collection in the 1970s. Eventually, security concerns caused the university to deaccession the collection and the coins were sold in a series of notable auctions through Stack's and Bowers and Ruddy Galleries from 1976 through 1981. The Silver Center cent was sold in lot 2347 of the Garrett Collection, Part IV, the final sale of the series, where it realized a strong price of $95,000. It has not been publicly offered since. Bob Simpson acquired this coin in a private transaction in 2012." -- Heritage Auctions

 

I have a dozen messages like this one on my phone, different wording, same begging. And, just where is this 5X match supposed to come from? To me, it's a scam. I get these because I was a Republican precinct delegate to a state convention. I block every one and they just use a different phone.



I mean, OK, so they are soliciting. Why is soliciting against the law? Why is one market product or service singled out? The FLD Party of Minnesota is not just against gold, they are against the people who hold it. That is the mirror image of a statement from Ainlsey Hayes, a character in The West Wing. She was a Republican lawyer who joined the White House legal staff. She said, "You are not just against guns. You are against the people who have them." Same thing here. Even F. A. Hayek was less than sanguine about gold. But he did not demonize the people who have it.

 

I didn't watch The West Wing, I watched Seinfeld !

 

Contact the attorney general. It's harassment.