Boiler room schemes are usually large-scale operations designed to defraud as many investors as possible, the SEC said. The operators of such schemes often employ cold calling or use e-mails, text messages or social media to zero in on vulnerable investors. Characteristics of boiler room operations typically include:
- Aggressive sales tactics or threats.
- Pressure to buy quickly.
- Unsolicited offers.
- Promises of high returns with little or no risk.
No one can say that boiler room operators aren’t wily. Recent SEC cases have targeted schemes selling imaginary shares in a company that had supposedly created football equipment for the Super Bowl and the sale of stock in a firm that supposedly built cell phone and online technology to sell state lottery tickets.