LGLS 3523 Lecture Notes - Lecture 5: Business Opportunity, Curbed, Price Fixing
31 Mar 2017
School
Department
Course
Professor
Document Summary
Boiler rooms are operations run by stock manipulators who, through deception and misleading sales techniques, seduce unsuspecting and uninformed individuals into buying stocks in obscure and often poorly financed corporations: bankruptcy fraud. The similar-name scam involves the creation of a corporation that has a name similar to that of an established rm. The objective is to create the impression that this new company is actually the older one. If the trick is successful, the swindlers place large orders with established suppliers and quickly resell any merchandise they receive, often to fences. At the same time the swindlers remove all the money and assets of the corporation and either le for bankruptcy or wait until creditors sue. Then they leave the jurisdiction or adeptly erase their tracks. The old-company scam involves employees of an already established firm who, motivated by a desire for quick pro ts, bilk the company of its money and assets and file for bankruptcy.
