Shareholder Information

BOILER ROOM SCAMS

Over the last year many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based 'brokers' who target UK shareholders offering to sell them shares in US or UK markets which often turn out to be worthless or very high risk shares.

On the 13 March 2008 the City of London Police provided details on the latest “Boiler room” scam to hit investors. In the biggest investor scam uncovered to date, fifteen thousand mainly British investors lost a total of £34.5million after being persuaded to transfer money to offshore accounts under the pretence of buying valueless shares in American companies.

The name boiler room scam is given to such operations due to the high pressure sale techniques used by the call centre operatives initiating the scam in order to persuade their target the opportunity is a “once in a life time” offer to make money. Cold calling to sell shares is illegal and the criminals may try to get round this by writing to the customer first to say that a “salesman” will be in touch. At the time of the call the “salesman” will often be forceful, persistent and highly pressurising and as such create a sense of urgency that the opportunity must be taken immediately.

It is not just the novice investor that has been duped in this way many of the victims had been successfully investing for several years. Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports. If you receive any unsolicited investment advice:

1.   Make sure you get the correct name of the person and organisation

2.   Check that they are properly authorised by the FSA before getting involved by visiting  www.fsa.gov.uk/register

3.   Report the matter to the FSA either by calling 0845 606 1234 or visiting www.moneymadeclear.fsa.gov.uk

4.   If the calls persist, hang up.

If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme. The FSA can be contacted by completing an online form at www.fsa.gov.uk/pages/doing/regulated/law/alerts/overseas.shtml.

Details of any share dealing facilities that the company endorses will be included in company mailings.

More detailed information on this or similar activity can be found on the FSA website www.moneymadeclear.fsa.gov.uk