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Share Investment and Boiler Room Fraud

Advice for Victims of Share Investment and Boiler Room Fraud

Share investment fraud or ‘Boiler room’ scams are surprisingly common. These operations defraud investors by persuading them to part with their money in exchange for shares in worthless companies, in land or in other assets such as wine, art or land. Share dealing is regulated by the FCA. These ‘boiler rooms’ are unregulated and unlicensed and, as such, are illegal.

They are known as ‘boiler rooms’ as they use high-pressure and unscrupulous sales tactics, often operating out of small, cheap office spaces. These scams are also known as share sale fraud, hedge fund fraud, land banking fraud or bond fraud.

In the case of shares, the value (or likely future value) is talked up, and outside research is discouraged. In the case of land (known as land bank fraud) the planning permission or development promised is usually impossible to secure because of the condition of the land or lack of planning permission.

The seller (fraudster) also often imposes a false sense of urgency by stating that there is a deadline or finite time period within which to invest.

These scams usually come out of the blue, with scammers cold-calling investors. They source telephone numbers from existing shareholder lists and may pose as representatives of companies with which the investor has already dealt.

Boiler rooms scams usually require complex investigation, and may involve multiple prosecution agencies. It is often the case that it is not only investors who are drawn in by the scam, but also legitimate professionals who also believe they are dealing with a legitimate business.

In these cases, the bodies investigating or prosecuting will require to investigate the legitimate business which is time consuming and stressful.  

Have I been the victim of a boiler room/share scam?

You may have fallen victim to a boiler room scam if:

  • You were contacted ‘out of the blue’ with an investment offer that you accepted
  • You were pressured into making an investment decision
  • You have not heard from the firm in question in some time
  • You were asked to keep the details secret
  • The firm you dealt with was based overseas and thus “outside of the FCA’s jurisdiction” according to the scammers.

How can I protect myself from boiler room scams?

First of all, if an offer is too good to be true then it usually is. Secondly, you can take precautions by:

  • Using the FCA website to ensure that the firm offering you the investment is registered in the UK. In any dealings with a financial institution, whether legitimate or not, you will be unable to claim compensation if they are not FCA registered.
  • Never take up offers of investments on the spot.
  • Do not pass out bank details or other financial information.

What can I do if I’ve been the victim of a boiler room scam?

First of all, there is no shame in being the victim of one of these sophisticated and predatory operations. By coming forward you may be able to recover some or all of your lost funds and prevent the scammers from targeting others. Secondly, contact Selachii LLP. We have extensive experience in helping clients to recoup and recover funds lost in boiler room scams. Our team have built up knowledge and experience in the workings of these schemes and the methods they use to target investors. We also understand how professional misconduct can cause you to lose money.

This puts us in a unique position with respect to helping creditors and investors to recoup their losses and in holding scammers and fraudsters to account.

We have an excellent track record in holding scammers to account including having assets frozen, even where companies have been set up using fake information. Our approach is based on close collaboration with forensic accountants and other experts, prosecution agencies (both domestic and international) to trace and recover your assets.

While it may feel hopeless, there are legal avenues open to you to recover your money. At Selachii, we explore each of these and investigate the best approach to recover your investment. 

In most cases, the recourse is to issue a winding-up petition against the company who first elicited the investment. This enforces the debt and takes the matter to the Official Receiver. At this point, our expert team of solicitors go to work investigating matters, with the help of other experts, to recover your funds. We will seek to recover the funds from the company or the individuals responsible.

In order to pursue an individual directly for repayment of funds they’ve misappropriated, there must be evidence of some kind of wrongdoing, such as misfeasance, misrepresentation or unjustified enrichment.

If the investigative and prosecuting authorities have information on the fraudster (normally because they’ve got a criminal conviction) we work to get access to this data. It’s important to bear in mind that the civil standard of proof, which only requires to be proved on a balance of probabilities, is lower than the criminal standard of beyond reasonable doubt.

As well as acting for individuals and businesses, we have also acted in class actions (also known as multi-party actions), where the same fraud has been committed against many individuals. This means that an individual unable to recover funds because of the costs and time involved can have recourse by pursuing legal action as part of a group.

 

Contact Selachii Expert Fraud Litigation Solicitors

 

We take pride in building case-winning strategies tailored to the needs and budget of our clients, and are expert in tracing and recovering assets in both the UK and overseas. If you require first-class, cost-efficient legal advice on investment fraud, or any other commercial dispute matter, please contact us.

How Selachii Can Help

Fraud is an issue that demands extreme tact as well as often needing great doggedness and attention to detail. We don’t believe in simply handing out one-size-fits-all solutions to problems. We will focus on your specific circumstances before working out the best and most cost-effective way of helping you achieve your aims.

Selachii is a dynamic litigation law firm based in Kensington, London. We put the best interests of our clients at the heart of everything we do. We work with both businesses and private individuals, giving them legal advice and support which is unique to them and their situation.

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