Precedent in boiler room case
bangkokpost.com
BUSINESS NEWS - Monday 14 March 2005
Plaintiffs get 30% of B33m in `investments'
KRISSANA PARNSOONTHORN
In a precedent for the Thai legal system, a group of 12 Australian investors has successfully reclaimed 11.7 million baht in funds from an illegal securities ``boiler room''.
The payment by the Civil Court was made last month and follows a nearly three-year court battle against International Asset Management (IAM), a company first raided by local securities regulators in 2001. The payments are the first to be made to investors involving a boiler room operation in Thailand.
While the repayment represents only 30% of the investors' original investments with the company, lawyers representing the group said the victory offered at least some relief to the cheated investors.
Sukhothai Inter Law and Business first filed a 33.08 million baht claim against IAM in August 2002 with the Southern Bangkok Civil Court.
Sutham Siribunyawat, the managing director of Sukhothai Inter Law, said the court ruled against IAM in December 2002.
The law practice, with Yongyut Srikrist as the lawyer in charge of the case, was able to trace funds held by IAM in the Thai banking system. Eleven million baht was found to have been held in an IAM account with Standard Chartered Bank's Bangkok branch.
In March 2003, the court directed the bank to send the funds to the court, with the account formally frozen by police investigators that May.
The funds, amounting to 11.76 million baht, were formally remitted to the court by the bank in January 2004, and were released to the plaintiffs earlier this year.
``We faced a number of hiccups caused by delaying tactics set by local authorities and we had to lodge further petitions at the court to seek the release of the funds from the frozen account. Finally, we got the money early this year as the bank agreed to send the funds to the court,'' Mr Sutham said.
The amount was split up by the Legal Execution Department and paid to the 12 Australian investors: Wendy Billington, John Firmstone, Dean Powell, Timothy Sessions, Douglas Gillies, Olgar Marr, Ross Lockyer, Anthony John Farugia, Darren Ryan, Peter Pace, Michael Dodson and George Cooney.
``The victory of the investor group will encourage other victims from boiler room scams to take the legal route to get their money back. It offers proof that the wheels of justice still grind here,'' Mr Sutham said.
He said it was often difficult for victims to reclaim their investments, particularly as law authorities were more concerned with the criminal prosecution of the case, rather than the civil charge.
``We learned from this case that the police are not serious about cracking down on boiler room operations in Thailand. They still exist and the police are just concerned about criminal court cases to put bad guys in jail. They sometimes forgot to help the victims get back their investments,'' Mr Sutham said.
He urged other boiler room scam victims to bring their cases before the civil court as quickly as possible.
``You can sue, and you will win for sure, but the problem is actually getting your money back. The police should know about this,'' Mr Sutham said.
A boiler room refers to an office selling securities without a licence, where employees use high-pressure sales tactics to convince clients to purchase stocks or other securities.
The SEC has identified and prosecuted dozens of companies accused of operating illegal boiler rooms over the past several years, including companies with names such as The Brinton Group, Sigama Capital Management and Bowen Reece.
Clients are typically overseas investors contacted through unsolicited telephone calls.
Authorities say that at the worst, many such operations are outright scams where investors are coerced into paying funds for non-existent securities.
Mr Sutham said prosecuting boiler room operators was difficult, given the fact that many of the victims live overseas and are reluctant to come and testify before the Thai court.
``I don't know in how many cases the police have actually successfully tracked down and frozen money,'' Mr Sutham said.
``How can we stop them? The punishment [for boiler room operators] is insignificant. Most just face deportation and perhaps a fine of only 200,000 baht.''
The SEC offers information about boiler room operations, including a list of suspected companies, at its web site at www.sec.or.th/en/educate/alert/boiler/broom.shtml.
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