Scrutiny of these types of offences has increased enormously since the downturn in the economy. This often leads to prosecutions being brought to ensure that justice is being seen to be done. At Stephensons however we find that this scrutiny often taints legitimate professionals and that ordinary stockbrokers and others involved in financial services can find themselves embroiled in such accusations. We are experienced in representing professionals in this area and understand the devastation such investigations can cause.
A boiler room fraud is essentially a serious form of unlicensed share dealing. Share dealing is a regulated activity under the Financial Services and Markets Act 2000. The term boiler room refers to a busy centre of activity. This would usually be a room of salesmen using telephone cold calling to commit fraud by selling worthless or non-existent shares. The salesmen will often pretend they are stockbrokers and persuade investors to part with their money to buy shares in non-existent, worthless or near bankrupt companies. Often tactics are employed to try and intimidate those changing their minds by claiming they have made a binding verbal contract. Legal action is often threatened.
Often people can be accused of this type of fraud when they themselves have simply been recruited by the real fraudsters without knowing about the fraud that is being perpetrated. The sales team often have no idea of the scam.
The most common charge used for this fraud is conspiracy to defraud. A conspiracy is simply an agreement and here it means an agreement to defraud someone. The important thing for us to remember is that it is for the prosecution to show dishonesty. If the prosecution cannot prove that then you cannot be convicted.
These large scale investment frauds often have international elements due to the fact money is often traced overseas. Increasingly the Financial Services Authority (FSA) and City of London Police are using their powers to freeze assets at an early stage with restraint orders. This can be devastating on a business or an individual and you will need assistance to challenge this if you become the subject of one.
