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Share Scams
By David Phillips
Published on 09/16/2007
There is a host of scams. Not all such sites are so safe to visit. Multi-national response needed. Some companies are formed and have Internet names that look very familiar and can damage reputation.

There are a host of scams.
Professional Internet promoters, some with elaborate briefing sites and any number of ways to avoid regulators.
Masquerading as ‘Analysts’ they offer a range of services. And look very appealing. The content of www.financialWeb.com/stockdetective is packed with scams and promotion devices, names people and companies and shows Web site URL’s.

It has a marvellous page of alleged scams called 'Stinky Stocks'. Not all such sites are so safe to visit. Some offer information about scams and are the heart of them as well.

The Canadian Globe and Mail reported in April 1998 that regulators in three countries investigated an international stock sales scam involving a group that used a Canadian brokerage firm's Web site to lend itself credibility. The group, which sold stock in fictitious companies to victims in Sweden, operated under the name Turner Phillips and said its head office was in Vancouver.
In fact, regulators have no idea where the firm operated from or who is behind it, Lang Evans, compliance officer at the British Columbia Securities Commission, said: "It's quite an elaborate scam. . . . We're not even certain that the names are anything more than pseudonyms or aliases."

The BCSC published notices to alert the public to the fraud, which used boiler-room sales techniques and the Internet to pitch shares to investors. The notice said the scheme "has been recently conducted on an international scale, resulting in the loss of
millions of dollars to affected investors world-wide."

The scam worked like this:
Turner Phillips found a novel way to make it appear as though it was a member of the Investment Dealers Association of Canada, three Canadian stock exchanges and the NASDAQ Stock Market in the United States.

It copied all the information on the Web site of an unnamed Canadian investment dealer that is a member of these self-regulatory agencies and superimposed the name Turner Phillips onto that firm's data, then posted the material to its own site. Turner Phillips contacted prospective victims over the telephone and then referred them to the Web site for more information on the firm. Although Turner Phillips said it had its head office in Vancouver, all it had in the city was a mail drop and a telephone answering service. Calls placed to the Vancouver number were forwarded to a location in Washington State and then from there to another location. Mail was forwarded to somewhere in Ontario.

Regulators in British Columbia, Alberta and Ontario in Canada, the Securities and Exchange Commission in the United States and officials in Sweden launched an investigation on March 20 after complaints from about six Swedish investors.

This case mirrored a similar one in the previous year. In that case, an Irish-registered firm sold shares in three small U.S. companies before it was closed by securities regulators. But even after the SEC began investigating that case, officials at the Irish company posed as securities investigators to entice more money out of their victims, according to the Financial Times.

The Irish firm approached customers who had already bought shares from it with offers to buy back their shares at many times the market price. These offers were dependent on the customers paying advance fees. The men posing as investigators gave assurances that the offers were genuine. The fees customers paid disappeared, thus multiplying their losses.

Some companies are formed and have Internet names that look very familiar. One Stinky Stock candidate on the www.financialWeb.com/stockdetective site is B.A.T. International, called by Stock Detective “B.A.T. Out of Hell”. It has no Links with the UK Company, BAT Industries. Its US namesake’s reputation is poor and in the Global market for information there could be confusion.

In an Autumn gale of e-mailed press releases and advisors notices, there is every opportunity to create chaos with a company’s shares.