A Hong Kong court has passed a recent judgment against a group of boiler room fraudsters and ordered the perpetrators to compensate their 14 victims.
The case was brought to the court by Hong Kong’s financial watchdog agency, the Securities and Futures Commission (SFC), against three unlicensed entities – Cardell Limited, Waldmann Asset Management, and Doyle Hutton Associates. According to the SFC, all three scammers claimed to be based in and operate from Hong Kong and solicited investors through emails and cold-calls to open trading accounts. They further pushed the victims to invest in securities and futures products via their websites at various times in 2014.
The fraudulent entities also held accounts at four Hong Kong-based banks – Cedan Limited, Hamtron Limited, Cardan Limited, and Cardan Limited – and even asked their victims to deposit funds directly in these accounts.
The SEC uncovered that none of the trades in securities and futures agreed upon with the affected investors were ever executed on any recognized exchange.
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In January 2016, the watchdog agency received interim injunctions from a court to freeze the funds in the accounts held by the fraudsters at all the four banks.
The court further found the banks to have aided and assisted the unlicensed firms in pulling off the boiler room scam.
Shady Bank Deals
In 2015, multiple Hong Kong banks were accused of laundering cash worth hundreds of millions of dollars obtained by Thailand and Philippines-based boiler room fraudsters. In those scams, thousands of investors, primarily from America and Europe, were duped for years.
Earlier this year, Belgium’s Financial Services and Markets Authority (FSMA) issued a warning against the unauthorized activities of multiple boiler rooms that are offering investments in the country without complying with Belgian financial legislation. The agency further released a list of seven operators suspecting their engagement in fraudulent investment tactics.