The Financial Services and Markets Authority (FSMA) of Belgium has just issued a fresh public warning against new boiler room scams. The latest announcement deals with the unauthorized activities of six rackets that have been targeting Belgian investors.
The FSMA’s latest warning builds on a lengthy list of unauthorized investment firms and credit institutions in Belgium. Such groups are prohibited from offering investment services in or from the country and have been fraudulently soliciting customers via boiler rooms.
Boiler room scams can best be defined as any type of fraud that involves the contacting of customers in an unsolicited manner or medium, most commonly by telephone, making offers on rather obscure shares or exotic financial products. The following 6 firms are potentially classified as boiler rooms operating unlawfully in Belgium:
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- Bellmore Group
- Devin Consultants
- Excon Fuji Securities
- Olivier and Mann
- Orix Capital Trading
- Westward Holdings
Boiler rooms pose a particular problem for market participants given that these operations present themselves as authorized service providers, complete with professional websites and forms to fill out – it should be noted that these entities are in no way authorized to deal such products or solicit these transactions or trades.
These warnings are part of the FSMA’s routine efforts to inform the public of unauthorized activities in order to shield domestic clients. European regulators have taken a more aggressive stance against scams in recent years with sustained efforts to inform and educate the public against unauthorized foreign exchange (FX) and contracts-for-difference (CFDs) providers, and other instruments.
Be on the lookout for boiler room scams
In addition to a routine warning service published by the FMSA, the regulatory authority has outlined a number of protective measures for market participants to help mitigate the risk of falling victim to unauthorized service providers and boiler room scams. Investors are urged to verify the identity of any organization contacting them, as well as checking and staying up to date with the FSMA warnings.
It is also important to note if the investment firm holds authorization to offer financial services, and the public can contact the FSMA in the case of any queries. Offers of unrealistic returns, or requests to transfer funds to a country with no connection with the financial group, should serve as red flags.
The updated list follows an earlier announcement this week in which the FSMA warned against multiple unauthorized binary options service providers.