• Australian (ASX) Stock Market Forum

Overseas broker: Is this a scam?

Discussion in 'General Investment and Economics' started by Daz Voz, Jan 9, 2012.

  1. Daz Voz

    Daz Voz Member

    Posts:
    7
    Likes Received:
    0
    Joined:
    Jan 9, 2012
    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. prawn_86

    prawn_86 Mod: Call me Dendrobranchiata

    Posts:
    5,850
    Likes Received:
    1
    Joined:
    May 23, 2007
    No.
     
  3. Daz Voz

    Daz Voz Member

    Posts:
    7
    Likes Received:
    0
    Joined:
    Jan 9, 2012
    Thanks. Should I mention the name of the company?
     
  4. skc

    skc Well-Known Member

    Posts:
    7,773
    Likes Received:
    21
    Joined:
    Aug 12, 2008
    I think you know the answer to this already.

    You have the answer to this as well.

    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.

    Your 3rd rhetorical question!

    No. You already know the answer! Never.

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

    Junior Well-Known Member

    Posts:
    530
    Likes Received:
    1
    Joined:
    Nov 15, 2006
    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. tech/a

    tech/a No Ordinary Duck!

    Posts:
    16,251
    Likes Received:
    38
    Joined:
    Oct 14, 2004
    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. Daz Voz

    Daz Voz Member

    Posts:
    7
    Likes Received:
    0
    Joined:
    Jan 9, 2012
    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. awg

    awg Well-Known Member

    Posts:
    1,700
    Likes Received:
    0
    Joined:
    Sep 25, 2007
    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. bellenuit

    bellenuit Well-Known Member

    Posts:
    2,455
    Likes Received:
    0
    Joined:
    Sep 18, 2008
    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. Daz Voz

    Daz Voz Member

    Posts:
    7
    Likes Received:
    0
    Joined:
    Jan 9, 2012
    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. matthewdean

    matthewdean Active Member

    Posts:
    30
    Likes Received:
    0
    Joined:
    Nov 15, 2010
    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. pixel

    pixel Well-Known Member

    Posts:
    4,269
    Likes Received:
    12
    Joined:
    Feb 3, 2010
    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/index.phtml/tag/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.
     
  13. Daz Voz

    Daz Voz Member

    Posts:
    7
    Likes Received:
    0
    Joined:
    Jan 9, 2012
    Okay. The company is called Springhill Group.
     
  14. Daz Voz

    Daz Voz Member

    Posts:
    7
    Likes Received:
    0
    Joined:
    Jan 9, 2012
    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. pixel

    pixel Well-Known Member

    Posts:
    4,269
    Likes Received:
    12
    Joined:
    Feb 3, 2010
    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.)
     
  16. So_Cynical

    So_Cynical The Contrarian Averager

    Posts:
    6,095
    Likes Received:
    5
    Joined:
    Aug 31, 2007
    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 :dunno: 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.
     
  17. Julia

    Julia In Memoriam

    Posts:
    16,986
    Likes Received:
    0
    Joined:
    May 10, 2005
    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. pixel

    pixel Well-Known Member

    Posts:
    4,269
    Likes Received:
    12
    Joined:
    Feb 3, 2010
    +1
    absolutely, Julia. And hat tip to Daz Voz for asking.
     
  19. So_Cynical

    So_Cynical The Contrarian Averager

    Posts:
    6,095
    Likes Received:
    5
    Joined:
    Aug 31, 2007
    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.
     
  20. cynic

    cynic Well-Known Member

    Posts:
    2,122
    Likes Received:
    1
    Joined:
    Feb 25, 2011
    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?
     
Loading...

Share This Page