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fraudsters sentenced

scotia
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fraudsters sentenced

#166393

Postby scotia » September 14th, 2018, 5:04 pm

https://www.bbc.co.uk/news/business-45521235
It looks like the FCA have had (at least one) result
The interesting part of the report is that "a sophisticated financial services professional, invested £922,795" in the SCAM

bungeejumper
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Re: fraudsters sentenced

#166585

Postby bungeejumper » September 15th, 2018, 5:19 pm

What I liked about that BBC report is that the main graphic is credited to "FCA/Thorpe Park". So which part did the FCA contribute? The Fright Night, or The Swarm?

This might be the longest sentence handed out so far, but it isn't the biggest boiler room scam to date. This pair got seven years for nicking £7 million, largely from pensioners. https://www.professionaladviser.com/ifa ... share-scam. And in that case it seems to have been the Serious Fraud Office that nailed them, not the FCA - which didn't exist then, of course. ;)

When I started getting Spanish boiler room calls on my own mobile phone, back in the early noughties, it didn't take an advanced sense of smell to locate the rat, and I told them straight away exactly what they were and where they could stick their offers. Despite that, they called me back at least half a dozen times. Apparently impervious to any negative response, and totally fixated on Getting to Yes. I haven't seen that level of determination since the last time the Jehovah's Witnesses came round.

BJ

scotia
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Re: fraudsters sentenced

#166637

Postby scotia » September 16th, 2018, 2:15 am

bungeejumper wrote:When I started getting Spanish boiler room calls on my own mobile phone, back in the early noughties, it didn't take an advanced sense of smell to locate the rat, and I told them straight away exactly what they were and where they could stick their offers. BJ

Agreed - its difficult to understand how people get conned by such obvious fraudsters. I suppose that greed over-rides common sense. And for a "sophisticated financial services professional" to get caught reinforces my views on such persons. Its 10 years since the collapse of Lehman Brothers, and the BBC World Service had an interesting discussion on the subject. Alistair Darling, who was Chancellor of the Exchequer at the time, recalled that the UK government were alarmed when they heard that Barclays were considering buying Lehman Brothers. And he received a phone call from the world's largest bank - RBS - which warned him that they were about to collapse within 3 hours! And all this resulted from parcelling up mortgage loans which would never be repaid into triple A investments. Again, sheer greed blinded the financial services professionals from the obvious flaw in this action. Regrettably the experts on the program concluded that very little had changed in the past 10 years, and huge debt mountains had been constructed without obvious means of reducing them.

PinkDalek
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Re: fraudsters sentenced

#167355

Postby PinkDalek » September 19th, 2018, 2:06 am

bungeejumper wrote:… This might be the longest sentence handed out so far, but it isn't the biggest boiler room scam to date. This pair got seven years for nicking £7 million, largely from pensioners. https://www.professionaladviser.com/ifa ... share-scam. And in that case it seems to have been the Serious Fraud Office that nailed them, not the FCA - which didn't exist then, of course. ...


https://www.bbc.co.uk/news/business-23421571 Richard Pope, Simon Odoni and Paul Gunter conned British investors out of £80m. and The City of London police believe it's the UK's biggest boiler room scam.

Okay that was in the States but Paul Gunter was sentenced to 25 years, Simon Odoni got 13 years and 4 months while Richard Pope received a far shorter sentence in return for his co-operation of 4 years and 9 months.

There have been others in the UK, much discussed over at the old place***, but no time to research now.

*** https://en.wikipedia.org/wiki/Boiler_room_(business) links to JakNife's old FAQ at The Motley Fool consumer website – Boiler Room FAQ but the link is broken, obviously. I've probably got a link somewhere or other to the WayBackMachine.

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Re: fraudsters sentenced

#167547

Postby Clitheroekid » September 19th, 2018, 8:10 pm

scotia wrote:The interesting part of the report is that "a sophisticated financial services professional, invested £922,795" in the SCAM

It almost certainly wasn't his own money! The one thing that's noticeable about these scams is how many involve investments that are introduced by "sophisticated financial services professionals".

You only have to look at the massive pensions scams that have been happening recently with firms like the disgusting Active Wealth (UK) Ltd - https://www.aclconsultancy.co.uk/ifas/a ... th-uk-ltd/ - to see that many of these fully authorised and accredited `professionals' were nothing more than wolves in sheep's clothing.

Also, many of the huge investment scams like the infamous Harlequin Property scheme - https://www.dailymail.co.uk/news/articl ... olice.html - could never have got off the ground without the active assistance and recommendations of these `professionals'.

Of course, the fact that the scammers were paying commissions of 9% and 10% couldn't possibly have influenced people who were duly authorised professionals ... could it?

It baffles me why the government banned commission on products sold by at least semi-respectable companies like Standard Life and RSA, but apparently saw no reason to place any restrictions at all on `alternative' (aka fraudulent) investments, which even now are being sold quite legally by fraudsters. Utterly bonkers.

didds
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Re: fraudsters sentenced

#167616

Postby didds » September 20th, 2018, 8:10 am

Clitheroekid wrote:It baffles me why the government banned commission on products sold by at least semi-respectable companies like Standard Life and RSA, but apparently saw no reason to place any restrictions at all on `alternative' (aka fraudulent) investments, which even now are being sold quite legally by fraudsters. Utterly bonkers.



Presumably because the government/parliament/civil service don't actually understand the industry/environment they are legislating in?

Other alternative suggestions may teeter on libel...

didds

bungeejumper
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Re: fraudsters sentenced

#167728

Postby bungeejumper » September 20th, 2018, 4:44 pm

Clitheroekid wrote:It baffles me why the government banned commission on products sold by at least semi-respectable companies like Standard Life and RSA, but apparently saw no reason to place any restrictions at all on `alternative' (aka fraudulent) investments, which even now are being sold quite legally by fraudsters. Utterly bonkers.

With big respect, CK, there's a whole chain of misunderstandings in what you're saying there.

First off, the term "alternative investments" includes a whole range of perfectly straight and legal investments, including Enterprise Investment Schemes and Venture Capital Trusts and Start-UP EIS and crowdfunding and god knows what.

What they all have in common is that they're all focused on small companies, so by definition they're all high risk. The government allows tax breaks for investors who back these risky companies, and has done so since the 1980s. It's one of the reasons why small UK companies are so dynamic by European standards.

It is, however, a rule that these high-risk investments are not to be sold to unsophisticated investors, or to people who couldn't stand the losses if they ever went belly-up. An adviser would be for the high jump if he ever tried to recommend such things to unsuitable purchasers.

Unlike conventional funds and shares, which are deemed to be suitable for all and sundry, and whose sale and promotion is much more tightly controlled. (The ban on commissions, to which you refer.)

So nobody is ever supposed to be in "alternative investments" unless they understand the risks, which are considerable.

That's your dividing line, then, and it's the primary answer to your question.

It's quite wrong to suggest that all alternative investment promoters are frauds - most are perfectly legit, and don't deserve to be tarred with that brush. But there will always be con men and boiler room operators out there who aren't legit. The authorities try their best to lock them all up, but ultimately it's up to the individual to spot them. Not that difficult, because they operate with mobile phones and "irresistible" email offerings.

No reputable adviser would recommend a boiler room fraud operation, although admittedly a few dodgy cases have slipped through the net in the past. (Big costs and public disgrace to the advisers concerned.) Those few exceptions apart, you can't ever protect against greed and stupidity. But heck, we knew that already.

BJ


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