Stocks Section

The Scamming Offshore Brokers Are Now Pushing UK Stocks! Beware They Only Want To Steal Your Money

August 2006

Hopefully those of you reading this article will know full well to avoid the nasty scamming offshore brokers. The ones that cold call you out of the blue offering shares in a company that you’ve never heard of (usually in a go-go industry like cancer prevention or technology) which is likely traded on a small American Exchange.

Well, if fall for their sales pitch (which incidentally is usually very very convincing) and invest with them there’s a 99% chance that your money will be stolen from you.

The Offshore Brokers Are Now Pushing Small UK Companies

If you think about it does it really matter what companies the offshore brokers push if their sole aim is to steal your money? So now with perhaps many UK consumers getting more educated about being offered shares in XYZ company which trades on some obscure American Exchange they’ll psychologically feel more comfortable when offered ABC company traded in the UK. Note, the firms they'll be pushing will always be on one of the smaller Exchanges like AIM or OFEX.

The kind of companies the scam brokers pick will normally share something in common - they're ‘soon’ to announce a major deal or merger etc that’s ‘sure to at least double the share price’ etc. Basically they prey on the natural greed that within all of us.

So watch it, and if you ever get a call out of the blue from a ‘stockbroker’ massive alarm bells should start to ringing straight away. For your information stockbrokers that are regulated by the FSA are NOT allowed to cold call.

Deal With Unregulated Companies At Your Own Cost

The MAJOR problem with the scam brokers is that they’re all unregulated and could never get regulated in 1000 years
Still, this hasn’t stopped them investing their own fake regulators to give punters the impression that they are – see this InvestorProfit.com article for more info
Also, don’t put it past them to tell you that they are regulated by the American SEC or the British FSA on the chance that their prospective clients won’t check
And don’t put it past them to impersonate a fully regulated company and even tell you you’re speaking to say ‘John Smith’ who is an appointed representative of the regulated firm
However, as sneaky and slimy as this trick is there’s a quick and foolproof plan for you to check them out with 100% confidence, and it will only take a few minutes

Go to Google and type in the regulators name that they give you, say for example the ‘FSA’
Then either look for the section of the site that lists the member firms which will have the main switchboard telephone number (or use the FSA’s helpline number) and call the firm in question asking to speak to John Smith
Tell him who you are and that you want to ask some more questions about the stock he was earlier calling you about – if he knows who you are then you can be assured that the firm is 100% legitimate but if he hasn’t got a clue then you were being setup
DISREGARD THIS SIMPLE ADVICE AT YOUR OWN FINANCIAL PERIL

Why Is Regulation So Important

Simple, it gives the customer someone to complain to if they feel they feel they've been mis-sold an investment, have been taken advantage of or at worse money has been stolen.

So if the company you’re dealing with is not regulated (by your country's financial regulator) and indeed is located offshore who exactly are you going to complain to and who is going to fight your case? Not the Police, not the Fraud Squad or even Interpol because even if you lost £500k the amount of money is not worth their while getting involved in. A different matter of course if it’s say a UK firm that has stolen your cash.

Summary

It’s easy and quick to sum up this piece because all we have to do is repeat the simple warning – NEVER do business with any broker that calls you out of the blue that IS NOT regulated by the FSA (or your country’s financial regulator).