Dutch AFM Reports Number of Boiler Rooms in 2016 Has Doubled

The Dutch' watchdog has reported an increase in boiler rooms compared with 2015 and warned of four further firms.

The Dutch financial watchdog Autoriteit Financiële Markten (AFM) has published a statement announcing that it has issued a total of 22 warnings against boiler rooms during 2016, double the number reported in 2015.

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A boiler room is a collective term for fraudulent individuals and organisations using clever salespeople and tactics to call potential investors and pressure them into buying shares that promise high returns, also known as cold calling. Boiler rooms often use trustworthy looking websites, sometimes using names that resemble those of a well-known financial organisation. In reality the shares are either worthless or non-existent.

The AFM has noted that boiler rooms have become increasingly sophisticated and aggressive in their attempts to convince investors to part with their money and has urged the public to express caution when receiving such phonecalls.

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Four New Boiler Rooms

In parallel with its statement today, the AFM has informed investors against four new boiler rooms which have been included on its warning list. These include Monex Securities BMO, an independent investment and wealth management leader which provides bespoke solutions for its clients, as reported by Finance Magnates back in November. This entity approached consumers with an unsolicited offer to buy shares.

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In addition, the watchdog warned of ORIX Capital Trading, a firm which “provides corporate and institutional investors access to ever growing east-west opportunities” which also happened to be red-flagged by Malta’s MFSA last month. This firm also solicited consumers with an offer to buy shares.

Tatsuno International, a Japanese based provider of global asset management services and financial solutions, also appears on the warning list, together with Universal Compliance Commission, a financial regulator charged with banking, investments and other financial services in Japan, which has also been flagged by Japan’s FSA.

Background

The AFM has been responsible for supervising the operation of the financial markets since 2002, overseeing the conduct of the entire financial market sector, while aiming to make a contribution to the efficient operation of these markets.

The Netherlands has adopted a tough stance against financial service providers in recent years. Last September, the country introduced a ban on binary options and CFDs advertising to prevent aggressive providers from harassing investors.

Furthermore, the AFM expects that the new MiFID II European regulations, coming into force in January 2018, will make the imposition of stricter requirements on high-risk investment products for consumers much easier.

 

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