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.

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Article Series

This article is part 11 of a 12 part series. Other articles in this series are shown below:
  1. Interactivity
  2. Brand Performance
  3. Online PR
  4. Sponsorship Marketing
  5. Brand Attacks
  6. Cyber Counterfit Sales
  7. Internal Communications
  8. Cyberstalkers
  9. Protection from Cyberstalkers
  10. Investor Relations
  11. Share Scams
  12. Protecting Investors
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