Bangkok Post of July 28
BOILER-ROOM CRACKDOWN
21 firms start fading away
Calls go unanswered as SEC keeps watch
scoop.bangkokpost.co.th
Krissana Parnsoonthorn
Following Thursday's crackdown on the "boiler room" operations of the Brinton Group and Benson Dupont Capital Management on Thursday, 21 unlicensed securities firms under close watch by securities regulators have quickly begun fading away.
SEC staff members examine bank notes and documents seized during Thursday's raid on the offices of the Brinton Group and Benson Dupont Capital Management on Sathon Road. Of the 85 foreigners detained, 81 were employees of the firms, while four others who had only been visiting were released. - Somchai Laopaisarntaksin
Telephone calls to many of the firms yesterday were met with continually busy lines or no responses. In some cases, answering machines requested that callers leave their names and account details and marketing officers would contact them later. Some said they were sorry, their companies had already been closed.
Of the 21 companies on the Securities and Exchange Commission's list, only Fortune International Inc, located at One Pacific Place on Sukhumvit Road, had a live telephone operator picking up calls.
However, the more senior of the two staff at the number said they did not work for the company and only collected messages.
"The company's staff have not been in today and we don't know when they would be back," she said, declining to give names of senior staff for contact in order to open an account.
Prasarn Trairatvorakul, secretary-general of SEC, said the agency had received many complaints from foreign investors that they had received "cold calls" from marketing officers of these firms, asking them to invest in stocks and using high-pressure tactics.
After transferring money to invest with the companies, investors found it difficult to contact the firms or to get their money back by selling shares.
Six unlicensed securities companies investigated earlier by the SEC have ceased operations. Criminal complaints have been filed against two of the companies: Capital Advisory Corp and Antella Investment Inc. The other four received warnings that they had violated the Securities and Exchange Act.
"Even when we really knew that they were involved in boiler-room operations, we could not arrest them. They changed their names and moved to other places," said Dr Prasarn.
Police led by Pol Col Piraphan Premputi yesterday returned to the site of Thursday's raid at the Bangkok City Tower on Sathon Road after receiving calls that some evidence had been removed from the offices of the two companies.
"After an investigation, we did not find any irregularities," said Pol Col Piraphan.
He said that of the 85 foreigners arrested on Thursday in the Brinton Group and Benson Dupont cases, 81 had been identified as the companies' staff and the remaining four were released as they had only been visitors.
According to directors at the SEC, the two boiler-room operations started with telephone operators making cold calls overseas to potential investors, mainly in Australia, New Zealand and Hong Kong.
All the telephone operators were foreigners, pretending to be licensed marketing officers, but none were licensed and many had no work permits. They followed scripts urging investors to invest in listed stocks in high-profile markets such as Wall Street or London and promising high returns.
Investors are asked to transfer money for the investments to the companies' accounts, either in Thailand or offshore. Usually they receive receipts but no share certificates. When they want to sell shares, they are often urged to wait because the price is expected to rise further. Selling shares or getting money back is usually impossible.
At the heart of the boiler-room operations is a large number of telephone lines and a switchboard, which often routes calls to the scam artists' personal numbers or mobile phones. Investors often do not know where the real office is, or if one exists at all. "When the foreign investors make a telephone call back to these firms, they will find that they are talking to a voice mailbox or an answering machine," Dr Prasarn said.
- The 21 unlicensed firms are: Bradford-Kempner Investments, Brooks Pearson, Crawford Peale, Delta Group International, Eastleigh International, Fisher Sterling International, Fortune International, Gerson Lehmann, Gibson & Petersen, Hudson International Group, One Dragon Pacific, Phoenix International Ltd, Price Stanley, Price Warner, Sherman Brothers, Kensington International, Madison Group, Wellington International, United Capital Management, Vantage International Management and Westwood Management.
- The SEC lists approved, licensed securities companies at its web site, www.sec.or.th. Investors can also call the office of the SEC secretary-general, tel 02-256-7708.
- The Australian Securities and Investment Commission also has extensive information on unlicensed traders, with real case histories, at www.asic.gov.au (click on "Gull Awards"). |
