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  1. #1

    Default Overseas broker: Is this a scam?

    A few weeks back I received a package from a brokerage company based in S-Tower, Seoul. I hadn't heard of them, and don't know how they got my contact details. It was a glossy prospectus with some application forms.

    Two weeks after that I received a call from one of their representatives. He was inviting me to take part in a block purchase they were making that day. I could get in on it for 80 Euro cents, and when it launches in a few weeks' time, it would start at 120 Euro cents and would probably climb to 140 Euro cents. They were offering this as a way to get new clients. Minimum investment was 5000 Euros. If I gave the assent and went through with it I would have three working days to settle, and they would send me the application forms through email. If I agreed to go ahead they would buy the shares with the company money, and he emphasised that he was trusting me to go ahead with the payment, but the block would close within a few hours so I needed to give an answer soon.

    After speaking with my wife I gave a vocal approval to get in on the minimum amount.

    After that, I checked out their website. It seemed oddly lacking. There were no case histories or staff details, no log in page or a place to download application forms. The advice on the page was generic.

    I received their email and the instructions were to deposit the money into an account in Latvia.

    I replied saying that I was concerned by the fact that there was nothing that indicated what I should do when it was time to sell or withdraw, and that they didn't require any instructions or account information on what to do when liquidating.

    I did not hear back so I did not send the money. After the Christmas break I got a call back from the same fellow, saying that when I wanted to sell or liquidate I should just call him and at that point I would give my account instructions etc. This was well after the T+3. But now, he said, a window had closed so I would need to send the money to a DIFFERENT Latvian account.

    I still haven't sent the money: , so I supposed I have gone back on a spoken agreement but the whole thing seems odd. My main causes for suspicion are:

    1/ this seems like an amazing deal, a 50 to 70% return in a couple of months. Why are they offering this to me, a very small time investor whose previous experience is a modest use of E-Trade? He said it was to establish a "relationship" but surely they would be better off getting some big fish with this.

    2/ T-3 came and went, I didn't send the money. If this were legit, and I were they, I would have said, "well, screw him, why bother with this nobody who is going to mess us around when we already have this fantastic deal." Instead, I've had repeated follow-up calls.

    3/ The hokey state of the website.

    4/ Why does it have to be a Latvian bank account?

    Does this seem legit? Is there some way I can check? Do legitimate brokers sometimes operate like this?

  2. #2
    Mod: Call me Dendrobranchiata prawn_86's Avatar
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    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by Daz Voz View Post
    Do legitimate brokers sometimes operate like this?
    No.

  3. #3

    Default Re: Overseas broker: Is this a scam?

    Thanks. Should I mention the name of the company?

  4. #4
    skc's Avatar
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    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by Daz Voz View Post
    1/ this seems like an amazing deal, a 50 to 70% return in a couple of months. Why are they offering this to me, a very small time investor whose previous experience is a modest use of E-Trade? He said it was to establish a "relationship" but surely they would be better off getting some big fish with this.
    I think you know the answer to this already.

    Quote Originally Posted by Daz Voz View Post
    2/ T-3 came and went, I didn't send the money. If this were legit, and I were they, I would have said, "well, screw him, why bother with this nobody who is going to mess us around when we already have this fantastic deal." Instead, I've had repeated follow-up calls.
    You have the answer to this as well.

    Quote Originally Posted by Daz Voz View Post
    3/ The hokey state of the website.
    While not conclusive, always a good hint. It's not that expensive to put together a good website in a hurry so don't let a good website fool you either.

    Quote Originally Posted by Daz Voz View Post
    4/ Why does it have to be a Latvian bank account?
    Your 3rd rhetorical question!

    Quote Originally Posted by Daz Voz View Post
    Does this seem legit? Is there some way I can check? Do legitimate brokers sometimes operate like this?
    No. You already know the answer! Never.

    Congrats for not being scammed so far... stay that way.

  5. #5

    Default Re: Overseas broker: Is this a scam?

    Definately a scam. Or at the very least, an investment which will probably fall in value.

    No one can guarantee returns like that, and if the returns were that good they would be selling it in small parcels via individual phone calls.

  6. #6

    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by Junior View Post
    Definately a scam. Or at the very least, an investment which will probably fall in value.

    No one can guarantee returns like that, and if the returns were that good they would be selling it in small parcels via individual phone calls.
    Scam

    Another variant is you are paid as s legit transaction
    Then the next deal is bigger at one point you'll
    Be fleeced.

  7. #7

    Default Re: Overseas broker: Is this a scam?

    Thanks, all.

    I suppose you are all thinking "why were you in any doubt" but I'm not a very experienced investor so I was thinking "well, maybe sometimes this _is_ how it is."

    Is there any point in reporting this to someone? Who would I report it to?

  8. #8
    awg's Avatar
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    Default Re: Overseas broker: Is this a scam?

    These operations have been called "steaming rooms" although I dont know the exact origin of the term.

    Substitute Latvia for Nigeria, would you send money?

  9. #9

    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by Daz Voz View Post
    Thanks, all.

    I suppose you are all thinking "why were you in any doubt" but I'm not a very experienced investor so I was thinking "well, maybe sometimes this _is_ how it is."

    Is there any point in reporting this to someone? Who would I report it to?
    Yes, undoubtably a scam. I have received such offers in the past and disregarded them.

    Also, even of the offer were somehow legit, remember that since they are overseas, you do not have the protection of the ASX when it comes to the rights of shareholders.

  10. #10

    Default Re: Overseas broker: Is this a scam?

    Yeah, that weighed on my mind. Some company based in Seoul, the money is in Latvia ... who would I go to if there were strife?
    I am an Australian but am something of an itinerant professional, currently in Singapore.

  11. #11

    Default Re: Overseas broker: Is this a scam?

    Wow,

    That is a sure thing scam, I am suprised that people can be so unsure when reading these kinds of emails. One thing comes to mind when I read similar emails... DELETE.

    Be glad you did not send any money as you would have never seen it again.

  12. #12
    short- to medium-term trader pixel's Avatar
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    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by Daz Voz View Post
    Thanks. Should I mention the name of the company?
    If you care about fellow potential victims, I think you should not only mention the name of the company, but also send the documents and telephone notes (if you have any) to fido's scam watch.

    https://www.scamwatch.gov.au/content...ag/reportascam

    If I receive something fishy, and if it's new, I forward it to them; I also let my trading buddies know: by email, by posting, or both. No matter how "obvious" it is to some, there's always a chance the scammers might catch someone unawares or at the wrong time.
    Artificial Intelligence is no match for Innate Stupidity.

  13. #13

    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by pixel View Post
    If you care about fellow potential victims, I think you should not only mention the name of the company, but also send the documents and telephone notes (if you have any) to fido's scam watch.

    https://www.scamwatch.gov.au/content...ag/reportascam

    If I receive something fishy, and if it's new, I forward it to them; I also let my trading buddies know: by email, by posting, or both. No matter how "obvious" it is to some, there's always a chance the scammers might catch someone unawares or at the wrong time.
    Okay. The company is called Springhill Group.

  14. #14

    Default Re: Overseas broker: Is this a scam?

    Got a call today from the fellow. I made it plain that I wouldn't be going ahead with it, that I was too suspicious about the whole thing. He mentioned that this would lead to the shares being marked derelict account, which would result in me not being able to trade on some bourses in the future. I said so be it.

  15. #15
    short- to medium-term trader pixel's Avatar
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    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by Daz Voz View Post
    Got a call today from the fellow. I made it plain that I wouldn't be going ahead with it, that I was too suspicious about the whole thing. He mentioned that this would lead to the shares being marked derelict account, which would result in me not being able to trade on some bourses in the future. I said so be it.
    That is an especially serious offense, which I would definitely report - with name and caller (hope you can remember).
    The threat of blacklisting simply because you wouldn't take his bait must surely be condemned in every civilised country.

    (But if I may quote Sir Joh: "Don't you worry about that." No reputable broker will refuse your business should you ever decide to trade any International Market. They all love their brokerage far too much.)
    Artificial Intelligence is no match for Innate Stupidity.

  16. #16
    The Contrarian Averager So_Cynical's Avatar
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    Default Re: Overseas broker: Is this a scam?

    I've got a sore neck shaking my head from side to side while reading this thread.

    Scams come in so many flavours now... its simply a matter of waiting for the right scam and the right victim to come together, it seems as if almost every one is vulnerable to some scam in some way....some say the storm victims got scammed and some say the system let them down, others say the victims bear the greatest responsibility for the blame.

    I wonder if the OP (Daz Voz) would of sent the money if the bank account was in Poland and not Latvia people have geographic comfort zones as well as other comfort zones...the stormers would of thought they were safe because surely they couldn't openly be fleeced in Australia by Aussie banks and an AFS licence holder?

    There's good money to be made off shore but like everything you have to go into it with your eyes wide open.
    Statistics: 172 Closed Trades since July 07, Trades: Winners 135 - Losers 37, Expectancy/$1 Risked: $0.78

  17. #17

    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by So_Cynical View Post
    I've got a sore neck shaking my head from side to side while reading this thread.
    Let's be fair to the OP here. He has clearly said that he is inexperienced and has been sensible enough to run the scam by this website where he has been reassured that his suspicions were absolutely justified.

    Reporting particularly the latest threat is what should happen. There will be plenty of vulnerable people who should know better, but will not, and - unlike the OP - will get sucked in.

    Let's not be critical of people who are prepared to air their inexperience on a public forum.

  18. #18
    short- to medium-term trader pixel's Avatar
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    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by Julia View Post
    Let's be fair to the OP here. He has clearly said that he is inexperienced and has been sensible enough to run the scam by this website where he has been reassured that his suspicions were absolutely justified.

    Reporting particularly the latest threat is what should happen. There will be plenty of vulnerable people who should know better, but will not, and - unlike the OP - will get sucked in.

    Let's not be critical of people who are prepared to air their inexperience on a public forum.
    +1
    absolutely, Julia. And hat tip to Daz Voz for asking.
    Artificial Intelligence is no match for Innate Stupidity.

  19. #19
    The Contrarian Averager So_Cynical's Avatar
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    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by pixel View Post
    +1
    absolutely, Julia. And hat tip to Daz Voz for asking.
    I'm just stunned Daz Voz and others have to ask...seriously.

    The same mob that chased Daz Voz were chasing maybe another 500 potential suckers that week and they probably bag one in a hundred.
    Statistics: 172 Closed Trades since July 07, Trades: Winners 135 - Losers 37, Expectancy/$1 Risked: $0.78

  20. #20

    Default Re: Overseas broker: Is this a scam?

    Quote Originally Posted by So_Cynical View Post
    I'm just stunned Daz Voz and others have to ask...seriously.

    The same mob that chased Daz Voz were chasing maybe another 500 potential suckers that week and they probably bag one in a hundred.
    Whilst I do understand what you're saying, 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).

    That famous fairy tale about the Emperor's New Wardrobe had a lot to say about the folly of failing to question for fear of looking foolish. Let's not forget the invaluable lessons learnt during our preschool years. The OP clearly recalls these, hence the willingness to ask questions. Are you willing to humbly follow such a fine example?



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