A bankruptcy action filed late Wednesday by First International Trading Corp. apparently does not jeopardize the government's case against the San Francisco precious metals investment company, according to government attorneys.
The petition for reorganization under Chapter 11 of the federal Bankruptcy Code was filed in Nevada two weeks after federal regulators froze the company's assets and seized its records in connection with a complaint by the federal Commodity Futures Trading Commission that off-exchange futures contracts sold by the company were illegal.
"Filing for bankruptcy was an attempt to defeat the court-appointed receiver," Arthur Salzberg, western regional enforcement chief for the commission, said in a telephone interview. "The case is very complicated, but eventually all the legal actions will end up in the San Francisco court."
The company sold five-year deferred-delivery contracts for gold and silver through three offices in the San Francisco area, an office in Irvine and offices in Dallas and Houston.