barnes, paul (2016): Stock market scams, shell companies, penny shares, boiler rooms and cold calling: the UK experience.
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Abstract
This paper examines the fraudulent sale of stocks and shares in shell companies by boiler rooms in order to defraud UK investors. It examines the law, the way boiler rooms are organised, the types of companies and scams used, and the markets involved including penny shares, US Regulation S stocks and the Over-the-Counter markets. It also examines the record of the UK regulators, primarily the Financial Conduct Authority (previously the Financial Services Authority) in acting against firms and individuals they had ‘authorised ‘, and prosecutors in taking criminal actions against the perpetrators (usually unauthorised brokers running boiler rooms). The paper makes the point that whilst the public purse bears the costs of prosecution and compensation, the quasi-regulators (the professionals adding credence to a scheme) have rarely been pursued either as parties to a fraud or sued for negligence.
Item Type: | MPRA Paper |
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Original Title: | Stock market scams, shell companies, penny shares, boiler rooms and cold calling: the UK experience |
English Title: | Stock market scams, shell companies, penny shares, boiler rooms and cold calling: the UK experience |
Language: | English |
Keywords: | Stock market scams, shell companies, penny shares, boiler rooms, cold calling, stock fraud, share fraud, stock manipulation |
Subjects: | G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading |
Item ID: | 71562 |
Depositing User: | Prof Paul Barnes |
Date Deposited: | 31 May 2016 10:06 |
Last Modified: | 27 Sep 2019 07:53 |
References: | Barnes, P. (1987) 'Share shops: an unwise investment?' Accountancy, February, 19. Barnes, P. (2009) Stock Market Efficiency, Insider Dealing and Market Abuse, Aldershot, UK, Gower. Barnes, P. (2013) ‘Stock and Securities Fraud’ in Encyclopaedia of White-collar & Corporate Crime, (Salinger, L. and J.G. Golson, eds) Sage Publications, Thousand Oaks, California, 873-88. Bishop, K.P. (2008) ‘Silver standard’, Los Angeles Lawyer, November, 32-42. Bosworth-Davies, R. (1987) Too good to be true: How to survive in the casino economy, London, Bodley Head. Financial Conduct Authority (FCA) (2014) A quantitative analysis of victims of investment crime, www.fca.org.uk/documents/research Francis, D. (1988) Contrepreneurs, Toronto, Macmillan. Pimlott, G.F. (1985) ‘The reform of investor protection in the UK – an examination of the proposals of the Gower Report and the UK Government’s White paper of January, 1985’, Journal of Comparative Business and Capital Market Law, 7: 141-172. Singer B. (2011) ‘Fake securities regulators scam investors’, Forbes, 5 December. Wilmot, T. (1985) Inside the Over-the-Counter markets, London, Quorum Books. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/71562 |