What is a Boiler Room?

The Financial Services Authority issued its biggest blacklist yet of firms that investors need to be extremely cautious of before handing over any cash. The list - which has tripled in size in a year - is an attempt by the watchdog to alert investors to potential cowboy firms that operate scams using heavy handed sales ploys to convince them to buy worthless shares. The watchdog has also warned of a new scam that means some people are being stung twice.

Commonly known as "boiler rooms", these unregulated firms often exist only on paper as a front for flogging shares with the promise of extraordinarily high returns when in reality they may be nearly worthless.

Thousands of investors have been caught out by scams where very slick, convincing and persistent salespeople ring up and verbally bludgeon them into parting with cash - usually with the line that the investor is getting in "on the ground floor" and by insisting they hand over cash immediately or lose out on the "opportunity" altogether.

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Stock Fraud - How To Avoid Losing Money

Con artists across the globe have stepped up their efforts to rip off investors, especially non-U.S. residents who have lost money in the U.S. securities markets. While it’s natural to want to recoup one’s losses as quickly and as fully as possible, the SEC warns investors to be extremely skeptical of offers to exchange worthless or poorly performing stocks for blue chips or "hot" performers.

Worthless stock is typically just that — worthless. And anyone who promises a quick way to recover from a bad investment is probably just lying to you. We encourage you to thoroughly investigate any investment opportunity, as well as the person promoting it, before you part with your money. This is especially critical if you are a non-U.S. investor seeking to invest in U.S. stocks — or if you learn about the opportunity over the telephone from a broker you don’t know. The "broker" may well be a con artist, and the deal may be a dud. Remember, if an offer sounds too good to be true, it probably isn’t true.

This alert tells you how to spot potential "stock swap" scams, how to evaluate the offers you hear about, and where to turn for help.

For more, head over to stock fraud at Stock Watchers.

SEC files charges against boiler rooms

The Securities and Exchange Commission ("SEC") has filed civil fraud charges in federal court in the Southern District of Florida against six boiler room operations in connection with their operation of a series of recovery room advance-fee schemes directed primarily at previously victimized investors from a number of countries, including Australia, Belgium, Greece, Hong Kong, Malaysia, New Zealand, Norway, Singapore, South Africa, Sweden and the United Kingdom. A "recovery room advance fee" scheme is a fraud wherein the perpetrators prey on investors who have lost money on particular stocks they purchased in the past. The perpetrators purport to offer these investors valuable assets in exchange for their nonperforming stocks but insist that the investors first pay an "advance fee."

More Stock Fraud

Stanley Cooper Asset

Stanley Cooper Assets were cold calling UK investors back in September 2004. They are offering to buy stocks in worthless companies for a premium, provided that you make an up front payment.

There is also reporting on Stanley Cooper Assets at the Stock Watchers site.

Stocks involved now are believed to have included Sun Biometrics and Biochex (BCHX.

It's a scam chaps, don't fall for it!

National Detection Clinics

Has anyone been contacted by National Detection Clinics. They have been cold calling with a preliminary inquiry asking if an investment opportunity. They claim to have a new FDA approved non invasive detection system for breast cancer. They have mentioned Merrill Lynch as a reference.

Ivan Cavric, the secretary of National Detection Clinics, was chief financial officer of Otis-Winston Ltd., whose shares were peddled last year by Franklin Asset Management, a boiler room operating out of Spain.

It appears shares of Otis-Winston also were sold by Jefferson Management, another boiler room. Another National Detection Clinics insider, Americo De Rosa, also has ties to Otis-Winston, according to investigatory documents from the Ontario Securities Commission.

Please treat this possible stock fraud with caution.

Dynamic Marketing (DMA) Zurich

It would appear that Dynamic Marketing (DMA) in Zurich have started canvassing calls for Boiler Rooms again. They began in November last year, and said that they were a call centre for international financial institutions. These institutions turned out to be boiler rooms.

Please refer to Dynamic Marketing

Milton Dewar Asset Management

They may have the outward appearance of a call centre, but they can send you on a dark and dangerous path.

Exercise caution!

Bailey & Bennett

Another year, and another boiler rooms appears on the horizon.

A firm claiming to be Bailey & Bennett from New York is aggressively seeking to buy stocks for a client, who are in the process of a takeover. The stocks involved are worthless (DFRC and Stem Genetics), and Bailey & Bennett appear to be paying around $8 per share for shares worth barely the paper they are printed on.

Please exercise extreme caution, and follow the links above for more information.

Bailey & Bennett appear to be wading their way through a database of Sukumo victims. If you have the pleasure of speaking to them, please ask them if there is a fee involved in the recovery of your money?

Remember, if looks too good to be true, it probably is!

It would now appear that Bailey & Bennett are offering $3.25 a share on the old tat.

Don't get taken in.

Watch the drama unfold at The Boiler Rooms site.

04/02/05
Bailey & Bennett continue to aggressively target boiler room victims. They are going through the Sukumo catalogue of stocks, and are now offering to purchase shares in Safe Care travel. Needless to say that Safe Care was a dud, and so are Bailey and Bennett.

13/02/05
Bailey & Bennett have hit rock bottom, even for boiler rooms standards.

They have used the names of victims of the 911 atrocity as the ficticious names for their fraudulent business.

These people are crooks, and prey on innocent people all around the world.

They have now found a new low, even for crooks.

For more on this story, please refer to this boiler rooms story.