BOILER ROOMS: FSMA ONCE AGAIN WARNS THE PUBLIC AGAINST VARIOUS COMPANIES ENGAGING IN UNAUTHORIZED ACTIVITIES IN BELGIUM
The Financial Services and Markets Authority (FSMA) warns the public against the activities of various “boiler rooms” that are contacting Belgian consumers.
Companies operating unlawfully and against which the FSMA warns the public are the following:
– AEG Financial and Pro-Nice Limited
– Bayside Financial Services and Pro-Nice Limited
– Belmont Financial Group
– Capital Precision Belgium
– Clewis Financial and Aoguan HongKong CO., Limited
– Condor Capital Management, Advanced Global Securities Corporation (AGS Corporation) (cloned firm), CCMGT Management Consultancy and CME Global Corporation
– Cunningham Mutual
– Manniworth Co Ltd, Elantra Ltd and Deniver Ltd
– Prestige Equity and Pro-Nice Limited
– Shinshiro International and Brilliant Sheen Limited
– Tenjin & Associates
– Voth Nixon Group
The above companies are not authorized investment firms or credit institutions in Belgium and may under no circumstances offer investment services in or from within Belgium.
Moreover, according to information in the possession of the FSMA, these companies may be “boiler rooms”.
We wish to reiterate that boiler room fraud is a type of fraud that involves contacting customers
unsolicited, often by telephone, offering to sell them little-known shares or exotic financial products.
Although the boiler rooms often claim to be an authorized service provider with a professional website and forms to fill out, they are in reality swindlers who offer fictitious or worthless shares or products.
As a rule, the consumer is enticed to make an initial, limited investment that very soon appears to be profitable. After that, the consumer is asked to make more and more additional investments. But unlike with the first, limited investment, the new investments lose money and/or when a consumer asks for his or her money back, it turns out to be impossible unless he or she makes further payments.
Fraudsters running such operations often do not hesitate to put the consumer under severe pressure (hence the term “boiler room”).
According to the latest information available, the FSMA has noted that these “boiler rooms” appear to be targeting company managers and directors in particular.
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For these reasons, the FSMA strongly advises against responding to any offers of financial made by the companies listed above and against transferring money to any account numbers they might mention.
More generally, in order to try to prevent further fraud, the FSMA recommends that investors:
– always verify the identity of the company (company identity, home country, etc.). If the company
cannot be clearly identified, it should not be trusted. If the company is located outside the European Union, the investor will also have to be aware of the difficulty of legal recourse in the
event of a potential dispute;
– consult the warnings published on the FSMA website as well as on the website of foreign supervisory authorities or of IOSCO, not only as regards the investment firm but also, where applicable, the beneficiary of the account whose number is provided by the latter. Since 17 July 2015, all the boiler rooms about which the FSMA has already published a warning are included in the “List of companies operating unlawfully in Belgium” published on the FSMA website;
Please note: the fact that the FSMA has not published a warning against a given company does not mean that that company holds a valid authorization. While the FSMA seeks to ensure that it publishes warnings in a timely manner, it is entirely possible that the activity of a given company that is operating unlawfully on the Belgian market may not yet have been reported to it, all the more so since unauthorized companies tend to change names regularly;
– check whether the investment firm holds an authorization by consulting the lists of persons authorized to provide regulated financial services that are published on the FSMA website under the tab “financial service providers”;
– be wary of unsolicited phone calls/emails (cold calling), i.e. where no prior request has been made by the investor. Such calls are often indications of an attempt at fraud;
– be wary of requests to transfer money to a country without any connection to the issuing company or with the State of which the investor is resident;
– be wary of (promises of) completely disproportionate returns. In this regard, it is frequently the case that fraudsters present significant earnings at the beginning, until the day when the investor asks to withdraw the funds invested;
– not to accept uncritically the information provided by such companies. More specifically, it is not because a company claims to be authorized by a given State’s supervisory authority that this is necessarily so. Investors should be sure always to verify the information they are given.
Investors should also beware of “cloned firms”: companies that pass themselves off as different, lawful companies even though they in fact have no connection with the latter. A close look at the email addresses or contact details for the companies in question may prove useful in order to detect potential fraud of this sort. Investors should also be wary of any purported guarantees linked to their account: if an offer is fraudulent, the guarantee promised is equally so;
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– ask their intermediary for clear and comprehensible information. Investors should refrain from investing if they do not fully understand what is being offered;
– be all the more suspicious if the company makes the pay out of returns conditional on an additional payment and/or the payment of a tax. These additional demands are often the sign of fraud.
More than ever, then, prudence is necessary. In case of any doubt, don’t hesitate to contact the FSMA directly (email: info@fsma.be). As well, please feel free to notify it of any suspicious company that has not yet been the subject of a warning by the FSMA.
Brussels, 16 December 2015
Press contact Jim Lannoo
Spokesman
T direct + 32 2 220 57 06
Email Press@fsma.be