Overseas broker: Is this a scam?

Daz Voz said:

Okay. The company is called Springhill Group.

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A boiler room usually has an undisclosed relationship with the company being promoted or undisclosed profit from the sale of the house stock they are promoting. The managers of the boiler room usually have close ties to the same owners of the company whose stock is being promoted. After the sales force of the boiler room sells their clients on the idea of the IPO, they are not allowed to sell the shares that the customer invested. This is because there is no real "market" for the shares, so any shares sold before buyers are attracted would create a large loss in the price of the stock, due to it being thinly traded with no public support. Once the insider investors are in place, a boiler room promotes (via telephone calls to brokerage clients or spam email) these thinly traded stocks where there is no actual market. The brokers of the boiler room actually "create" a market by attracting buyers, whose demand for the stock drives up the price; This gives the owners of the company enough volume to sell their shares at a profit, a form of pump and dump operation where the original investors profit at the expense of the investors taken in by the boiler room operation.

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Daz Voz said:

"I'm just stunned Daz Voz and others have to ask...seriously."

Fair enough. Live and learn.

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cynic's: I believe that it pays to encourage people to raise questions when finding themselves in a situation of uncertainty (the word prudence springs to mind).

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pixel said:

Don't stop asking, mate;

Among the replies will be some that answer your question, allay your concerns, confirm your doubts. Learning from other people's mistakes surely beats making them all yourself. Besides, you'll never live long enough to make them all yourself

Snide remarks mustn't deter you from asking questions; it wouldn't be the first time that someone remembers having learned a lesson "the hard way" because they didn't ask, and now feel smug and able to sneer at you for overcoming your reluctance.

"The only stupid question is the one that you don't asked."


+1

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