Share bargain scam warning

Hollywood movie Boiler Room with Vin Diesel and Giovanni Ribisi and (below) David Clueit has issued a warning to colleagues.
Hollywood movie Boiler Room with Vin Diesel and Giovanni Ribisi and (below) David Clueit has issued a warning to colleagues.
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A STOCKBROKER is warning investors to be on their guard after an American-based “boiler room” started targeting the Fylde coast.

The illegal scheme sees shareholders contacted by someone purporting to be from a broker, using a very plausible but high-pressure sales pitch to either sell or buy shares – with the sole aim of scamming money.

David Clueit

David Clueit

David Clueit, compliance director at Hargreave Hale on Whitehills Business Park, has written to warn his colleagues after both he and his father-in-law were targeted.

He said: “My father-in-law was very excited because he had been contacted by a broker in New York who had a client who wanted to buy his shares in a FTSE100 company for a client who was launching a takeover.

“The client was prepared to pay five times the market price. Naturally, the deal was being done in secret and the broker asked for total confidentiality.

“I was just explaining that this was a scam and the broker would eventually ask for money to be sent to them before they sent any money out – which they never do – when my phone rang.

“Amazingly I was also being offered an unbelievable price for a small number of shares in an investment trust I owned few years ago.”

Mr Clueit said the two shareholdings were totally unrelated, suggesting the scammers have a listing of shareholders across the Fylde coast.

A Poulton man, who did not wish to be named, was also contacted by the American firm.

He said: “At first I thought it sounded great. The woman said she was calling from New York and was offering me well above the asking price for some shares I had as her client wanted to up their stake in the business.

“But the more I asked, the more suspicious I became. Then she told me I needed to pay her a fee.

“That’s when I knew it wasn’t right. As soon as I said I wouldn’t pay, she wanted off the phone.”

More than £200m is lost to share scams every year.

The high pressure sales technique was highlighted in a 2000 Hollywood movie starring Ben Affleck and Giovanni Ribisi.

The Financial Services Authority (FSA) says it is hard for it to crack down on boiler room scams as they operate outside the regulatory regime, and are often based abroad.

The FSA is writing to 76,732 shareholders as part of Operation Bexley, to warn them they names and details appear on a list being used by fraudsters - particularly owners of shares in William Hill bookmakers.

A spokesman for the FSA said: “These lists – which scammers call ‘suckers lists’ – are like a fraudster’s phone book and are often traded between firms trying to con people out of their money.”