You probably thought they had all gone to jail, at least away. Sure, the regulators shut down infamous broker-dealers, but the truth of the matter is that these high pressure securities scammers are always one step ahead of the undermanned Feds.
The cold call cowboys who pressure prospects on the phone until they “buy or die” are still out there pushing their worthless and near worthless merchandise and you may be next on their sucker list. Don’t count on the regulators to protect you: they are out-gunned. It’s still the same game for the luckless investor, only the names have changed.
The story always boils down to (no pun intended) manipulation and fraudulent sales practices. Companies with no revenues (not to mention earnings) are taken public and the stocks typically soar during the first few days of trading as the initial investors unload their shares on an unsuspecting public. The crash inevitably follows and the investor is left holding the bag.
The moral of the story is quite simple. Do not buy securities from a broker you don’t know and a firm you haven’t heard of before. If you are exceedingly polite and find it difficult to hang up the phone just tell the broker you would be glad to receive information through the mail. When you get the material, throw it in the trash. When the broker calls back, tell him you’re broke. If you don’t, you may well find yourself in that predicament.
