Hot Topic: Boiler Room Scam

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In July 2017, 14 individuals were criminally charged by federal prosecutors for their role in swindling dozens of investors, including senior citizens, for a total of $147 million. Their modus operandi was comprised of setting up a seemingly legitimate stock-trading company, obtaining shares at below-market prices, and then reaching out to their victims through cold calls and emails to sell them these shares. The scheme also involved the “salespeople” forcing the victims into purchasing the shares and threatening them if they failed to transfer the money immediately.

This was a case of a boiler room scam. In such a con, the stocks that the perpetrators sell are real, but these are hyped so that victims exhibit interest in them. And once the scammers sense this, they use high-pressure tactics to push the victim to invest.

Image source: saga.co.uk

Hook lines intended to intimidate target into forking over money are common. There are also some cases wherein the supposed broker would state that investment has already been made on the victim’s behalf, and that failure to transfer funds would result in litigation.

A boiler room scam is not just an operation based on coercion, it also uses deception. After the said cold call, a quick research on the company will likely show that it is legitimate. Thus, those who plan to invest in stocks should conduct a more thorough study on a brokerage company or professional to ensure their hard-earned money does not fall into the wrong hands.

Check People makes it easier to research about a person’s profile, public records, and criminal records. This way, more informed decisions can be made and scams can be avoided. Visit this website to see for yourself the easy-to-use platform.