There's a movie on this theme of the same name you might like to see.
Boiler Room Operations You are sitting comfortably on the couch and the phone rings. The person on the other side introduces himself as representing a legitimate financial firm. He urges you to buy a high technology stock, a once in a lifetime opportunity that you should not miss.
Sounds familiar? You may have encountered similar scenario before. It could possibly be a boiler room operator trying to lure you into bogus investment opportunities.
Boiler rooms are financial frauds involving high pressure sales techniques, over the phone, Internet and email, to sell worthless investments. These operations are called “boiler rooms” because, when they were first encountered in the US, they usually operated out of cheap, low rent premises.
Investment opportunities sold by boiler room operators often appear very convincing, but much, if not all of what they say, is lies. They are usually not who, or where, they say they are and the investments they promote are often worthless or non-existent. If you send money to boiler room operators, don’t expect to see it ever again.
The SFC had been receiving reports from investors who have received unsolicited calls from stockbrokers claiming to have offices in Hong Kong. In fact, these companies only used facilities of business centres or secretarial firms to make them appear to be operating in Hong Kong. Some of them also use banks in Hong Kong to settle transactions.
To warn investors of these boiler room operations, we set up the Investor Alert section that you have just entered in November 2000. An "Alert List" contained a list of unlicensed firms who claim to be, or whose actions might amount to dealing in securities in Hong Kong was also published.
The following section describes the common features and facts about these boiler room operations and what you and the regulators can do about them.
How do boiler room operations work?
. How do boiler room operators choose their victims?
. Why do investors fall for the traps?
. What should investors do?
. What can the regulators do?
. Investor alert lists of overseas regulators
From:
Boiler Room Operations
