OT: I just got nailed by a boiler room brokerage scam: parking

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    Posted: 14 March 2009 04:42 PM

    Last summer I was contacted by a boiler room operation trying to sell me shares in a west texas wildcat operation. I declined.

    Today I opened up my mail and found a statement from the boiler room showing that I opened an account, purchased long and eventually sold for my purchase price again.

    This is a classic parking scam.

    Parking securities is a technique that brokers and brokerages use to move assets into your account with the intent of taking them back at a later date regardless of value. Parking is done for two reasons:

    1) They park securities in your account as a way to dodge the minimum capital requirements necessary to operate a brokerage.

    2) and/or as Investopia states: “When parking shares, brokerage firms are attempting to cover undeclared short positions left over from transactions whose stock was not delivered by the settlement date. Rather than performing a buy-in transaction, these firms collude with one another and, by delaying the settlement process, inflate the number of shares available for trade in the secondary market.”

    Either way, I’ll be contacting the SEC Monday.

    Could be worse: I once received a phone call from a local bank telling me that my home loan was approved and all I needed to do was to come down and sign the paperwork to get the check. I later learned that the loan officer had misplaced the post it note with my number and so he looked me up in the phone book and called. I had not applied for a home loan.

    [ Edited: 14 March 2009 04:48 PM by Eric Landstrom ]

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    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Posted: 15 March 2009 02:50 AM #1

    Eric Landstrom - 14 March 2009 07:42 PM

    Either way, I’ll be contacting the SEC Monday.

    Why bother?

    The SEC is only interested in investigating whether Apple failed to report accurately on its CEO’s health. You know, important stuff like that.

         
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    Posted: 15 March 2009 12:43 PM #2

    deasys - 15 March 2009 05:50 AM
    Eric Landstrom - 14 March 2009 07:42 PM

    Either way, I’ll be contacting the SEC Monday.

    Why bother?

    The SEC is only interested in investigating whether Apple failed to report accurately on its CEO’s health. You know, important stuff like that.

    Why? Because FINRA can’t wait to fine shut down people and firms who are illegal.

    Just so you know: this is last month’s legal actions and fines. One fine is large enough to positively impact the NYSE’s quarterly earnings.

    Signature

    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.