The Netherlands Authority for the Financial Markets (AFM) has issued four warnings against (presumed) boiler rooms in the period of January to April. Investors should not accept offers made by these fraudulent parties.
A boiler room is a collective term for persons and organisation that have smart salesmen call potential investors to convince them to invest in worthless or fake shares. Investors are put under great pressure to transfer money abroad. Boiler rooms often use website that appear reliable. They sometimes also use names that are similar to those of well-known financial organisations.
The AFM uses warning lists to warn consumers of specific boiler rooms. An investigation by the supervisor itself can lead to such a warning. The AFM also adopts warnings issued by foreign supervisors. Warnings were issued in the first quarter of 2014 against the following parties:
- Harden-Krause Private Equity Ltd.
Representatives of this party call investors without having been asked and offer gold options. If investors accept such an offer and then wish to sell their interest, they first have to transfer a sum (a ‘security deposit’) to make the sale final. This is presumed to be fraud.
- Global Brokers Asia.
This party claims to perform asset management.
- Hoover Bright Independent Finance Advisory.
Representatives are said to call investors without having been asked to do so and offer shares in American companies. Investors first have to pay a sum (a ‘security deposit’), however. This is presumed to be fraud.
- Clear Gains Ltd.
What can you do?
The AFM website provides more information about boiler rooms. The AFM also has a step-by-step plan for consumers that can help you prevent yourself from being defrauded by a boiler room. One of the most important tips is to never accept a sale of shares by telephone or email. Boiler rooms are very persistent; do not engage them in conversation, but always hang up the phone immediately. The AFM calls on investors to contact the Financial Markets Information Line if they have been called by a boiler room.
What does the AFM do?
The AFM investigates boiler rooms itself on the basis of signals it receives, inter alia from consumers. Furthermore, the supervisor works closely together with the police, the Fiscal Intelligence and Investigation Service, the Ministry of Justice and foreign supervisors, for example by sharing investigative information. Dealing with boiler rooms is no simple matter. They are often located abroad and often change their name.
The AFM is committed to promoting fair and transparent financial markets.
As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.