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The return of the Boiler Room

Friday, 15 May, 2015

Long-serving British poppy-seller died after being ‘tormented’ by cold-callers” is the disturbing headline on the Guardian story about 92-year-old Olive Cooke, whose body was recovered from Avon gorge in Bristol. There’s more nuance to the story than the headline suggests, but we do learn that “she had felt under pressure from the number of requests she received from charities by phone and letter”, and there is enough evidence to suggest that Ms Cooke was being targeted by those who have made a business out of exploiting the goodwill of the elderly.

But it’s not only the elderly that are at risk from the cold callers. “Boiler Rooms Meet Boardrooms as Scammers Invade City of London” is the title on a Bloomberg story by Neil Callanan today. Snippet: “Cold-calling con artists promising outsized returns are jumping on a surge in the availability of serviced offices at prestigious locations to give their operations an air of respectability, investigators in London’s main financial district say. These ‘boiler rooms’ dupe investors out of about 1.25 million pounds ($2 million) on average before they ‘rip and tear’ and disappear with little trace, they say.”

Definition: “A boiler room is a place where high-pressure salespeople use banks of telephones to call lists of potential investors (known as a ‘sucker lists’) to sell speculative, even fraudulent, securities. A boiler room is called as such because of the high-pressure selling.” Source: Investopedia

The return of the boiler room brings back memories of March 2000, when the NASDAQ peaked at 5132. That was the day when the dot-com bubble burst and lots of people lost their fortunes and their savings. With perfect timing, Ben Younger’s Boiler Room premiered that year. It has lost none of its punch or relevance with the passage of time. BTW, the NASDAQ closed at 5050.80 yesterday, up 1.39%.


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