Companies: Kitco Pool Controversy

Kitco offers unallocated precious metals accounts, called "Kitco Pool." Normally, unallocated precious metals account are like "IOU"s and backed by the "general stock" of the dealer. In the event of bankruptcy a pool holder would become an unsecured creditor of the company. Kitco addressed these concerns by stating that the Kitco Pool is 100% backed by physical precious metals, segregated from Kitco's own assets and belonging entirely to Kitco Pool customers.
Starting back in 2007, silver analyst Ted Butler voiced concerns over unallocated accounts including the Kitco Pool.^[9] In March, 2014 a blogger did some investigating and discovered that the Kitco Pool is no longer 100% backed by physical precious metals, not properly segregated from Kitco's own assets ($25 million of the Kitco Pool was seized by Revenue Quebec in June, 2011), and Kitco Pool customers are not considered creditors in the ongoing CCAA proceedings.^[10] Such changes would be acceptable if customers were made aware of them; however, the changes were made surreptitiously. Therefore, some people are investing based on past reassurances without knowing the truth about the Kitco Pool.
Kitco rejects ARQ allegations.^[11]