Hey . . . how come we weren't invited??
Dow Jones Newswires
SEC Staff Get Private Screening of 'Boiler
Room'
By JUDITH BURNS
WASHINGTON -- Boiler rooms are nothing new for the staff at the
Securities and Exchange Commission.
"Boiler Room," however, is a different story.
About 250 employees in the SEC's Washington headquarters flocked to a
private screening of "Boiler Room" Thursday. The film, starring Ben Affleck
and Giovanni Ribisi, opened in theaters Friday.
SEC Chairman Arthur Levitt wasn't among the crowd, as he was preparing a
speech telling mutual funds to tone down advertising hype, a spokesman said.
Other top SEC brass expect to see the film in coming weeks.
Those who attended the sneak preview "really seemed to enjoy the
experience," said one staffer, although some were disappointed that the film
ignores the SEC's role in fighting stock fraud and puts the Federal Bureau of
Investigation in the spotlight.
"That's just plain wrong," groused one SEC attorney. Another called the
omission typical, saying: "The criminal authorities get all the glory, while we do
all the work."
Hollywood hasn't focused on securities fraud since "Wall Street" was released
in 1987, though, and some SEC employees are happy to have the subject
splashed on the big screen, even if the agency didn't get a starring role.
"I didn't realize the SEC had any movie appeal," marveled Harold
Degenhardt, a district administrator in the SEC's Ft. Worth office. Although
cracking down on stock fraud is Degenhardt's day job, he said he'll probably
check out the movie some weekend, if only out of "curiosity to see how
accurate a portrayal it is."
"Boiler Room," directed by first-time filmmaker Ben Younger, focuses on the
seamy side of securities trading, where unknown stocks are pushed on
investors through high-pressure telemarketing from a brokerage "boiler room."
Real-life boiler rooms typically run so-called "pump and dump" schemes that
use manipulative tactics to pump up a stock's price, allowing brokerage
insiders to dump their own shares on unsuspecting investors.
Moviegoers may find the film eye-opening, but hard-core securities fraud is
familiar territory for SEC enforcement attorneys who collectively bring
hundreds of cases each year, including those involving boiler rooms.
Movie May Be Behind The Curve
Indeed, the SEC's New York office joined the U.S. Attorney's Office on
Thursday in bringing civil and criminal charges against Golden Lender, now
known J.P. Gibbons & Co., an alleged "boiler room," its two owners and two
of its brokers.
An attorney for one of the brokers questioned the timing of the arrests,
suggesting it probably was no coincidence they came one day before the
release of "Boiler Room."
SEC spokesman Chris Ullman declined to comment on the Golden Lender
case. As for the film, he said, "We welcome efforts to educate the public
about the dangers of buying securities from strangers over the phone."
And, while SEC enforcement attorneys need no such education, most said
they are eager to see how Hollywood presents the subject on screen.
"I can't wait to go," said Carmen Lawrence, director of the SEC's New York
office. "It's on my list."
Specifically, Lawrence said she's interested in seeing if Hollywood
screenwriters "know what we do and how hard it is" to make a case against
fraudsters.
Despite the difficulties, the SEC, working with criminal authorities, has
succeeded in shutting down a number of boiler rooms, including some of the
most infamous.
A.R. Baron, A. S. Goldmen, Biltmore Securities, Duke & Co., HGI,
Hanover Sterling, Monroe Parker, Sterling Foster, and Stratton Oakmont
have all been shuttered in the past few years, SEC officials point out.
Such firms may have been the model for J.T. Marlin, the fictitious Long Island
brokerage depicted in "Boiler Room," but they're much less common now, as
stock fraud - like everything else - has moved online. If anything, SEC
attorneys say, Hollywood may be behind the curve with "Boiler Room."
"We're seeing fewer and fewer telemarketing boiler rooms," remarked Daniel
Shea, director of the SEC's Denver office. "A lot more fraud is occurring over
the Internet."
For those who wind up on the receiving end of a boiler-room call, the SEC's
top cop, enforcement division director Richard Walker, has this advice: "The
best way to turn up the heat on a boiler room is to refuse to buy securities
from a stranger and to quickly hang up on those who employ high-pressure
sales tactics."
Walker has yet to see "Boiler Room," but Paul Roye, director of the SEC's
investment management division, joked Thursday that actor Tom Cruise
wants to play the 6'5" enforcement division head in a sequel, even though
"Tom's too short" for the part.
"Boiler Room 2" is a dim possibility, at least for now. And some SEC
lawyers, including Wayne Carlin, an assistant regional director in the SEC's
New York office, doubt they'll manage to see the hard-boiled "Boiler Room"
at all.
"Since I have a five-year-old and a one-year-old," Carlin explained, "I don't
see much other than Disney." |
