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    Our Mailing Address:
    Rainbow Investigations
    513-18th Avenue SW
    Calgary, Alberta
    T2S 0C6


    Better Business Bureau of Southern Alberta

    The Rainbow Scam Report

    Consumer and Financial Fraud

    (403) 245-0533 / (403) 651-9049

    Consumer financial fruad is a broad term for a for fraud involving investments in venture companies, public offerings for companies listed or going to be listed on stock exchanges, foreign exchange investments and other investment fraud..

    We have covered other types of financial fraud such as advance fee scams, credit card fraud, and fraud involving misrepresented financial representatives, and mortgage fraud elsewhere on the Rainbow Scam Report.

    Telemarketing / Boiler Room Techniques

    Boiler room is a jargon term used in the financial fraud investigation area. Boiler room operators are high-pressure sales people who sit in an office making cold calls to potential investors. The investments being touted are worthless, and are often penny or microcap stocks, foreign exchange investments, risky initial public offerings or house stocks. Almost always, boiler room operators target individuals with money such as retirees, business people, or professionals.

    Microcap Stocks or Penny Stocks

    Microcap stocks in the U.S. refer to companies with low or "micro" capitalization's [low total value of company stock]. These companies do not have to file financial reports with the Securities and Exchange Commission. In Canada, these stocks are simply known as penny stocks, which loosely means, stocks whose stock price is less than $1.00. In Canada, penny stocks do not have to file financial statements.

    Foreign Exchange Investments

    Operators try to solicit money for fictitious investments in exchange instruments traded in foreign markets. Often the foreign market just happens to be going through a financial crisis, and the promoter sells the investment on the basis that it's a good buy, because the investment is undervalued, due to the financial crisis. Often the money invested doesn't even make it to the proper foreign destination.

    Risky Initial Public Offerings (IPO's)

    Companies that are initially becoming publicly traded companies usually do an initial public offering to raise money. Many times the boiler room operator will try to sell IPO's that are underwritten by the investment firm to whom they are working for. In these cases, the telemarketing firm either has been hired as an agent to find buyers for the initial offering, or has purchased some of the initial offering itself, and is now trying to resell it to investors at a profit.

    House Stocks

    House stocks are stocks that an investment firm has purchased themselves to resell at a profit. Brokers of these house stocks will try to manipulate the market by buying stock of seldom-traded companies. By doing this they artificially pump these stocks prices up higher, and then sell them to investors at a profit. The buying investors find no other buyers for their stocks. Without buyers, the stock price falls, leaving the investor with worthless stock.

    Common Illegal Practices Of Boiler Room Operators

    Some boiler room operators run afoul of the security laws and regulations by engaging in abusive selling practices or by not being properly registered. Some of the common problems include:

    • Boiler room operators making unauthorized trades in the names of investors. Once the investor discovers what the boiler room operator did, the boiler room operator advises the investor to hold onto the stock (often worthless).
    • Boiler room operators often do not properly register as a broker-dealer. All stockbrokers and the firms that employ them are required to register in the state or province in which they do business.
    • Boiler room operators have misled investors about their firm, the firm's reputation and expertise. Operators have been known to falsify records, particularly relating to unauthorized sales.
    • Operators at times have not disclosed to investors that the stocks were house stocks, or that their firm was underwriting the stock.
    • Boiler room operators have unrealistic unsupported predictions of a stock's value. Boiler room operators often pressure investors to make hasty investment decisions.
    • Boiler room operators not executing orders to sell a stock; often the operator doesn't want to create downward pressure on the stock price.

    How To Avoid Being A Victim Of A Boiler Room Operator

    • Don't cave in to high-pressure tactics.
    • Don't make immediate investment decisions. Do some research on the potential value and risks of the investment. Make sure you understand the investment you are being offered, with its terms being clear.
    • Confirm that the broker [operator], and the brokerage firm are registered with the security regulators. Research the enforcement archives of the security regulatory agency to see if there have been previous enforcement orders on the broker and the firm.
    • Do not share personal information, particularly personal financial information, with the caller.
    • Know your own tolerance for risk. Many times it is just better to say no to risky companies. There are many blue-chip companies that offer growth without great risk

    From the Canadian Federal perspective here is some information from the Financial Consumer Agency of Canada which is now overseeing this area.

    Where To Complain regarding the above described financial fraud

    Canada

    Nationally
    Competition Bureau
    Financial Consumer Agency of Canada

    Provincial
    the government stock market regulatory agency
    eg. Alberta Stock Exchange

    United States

    Federal Trade Commssion

    Rainbow Investigations
    Consumer and Financial Fraud Stories

    Huge Calgary Based Ponzi Scam Busted

    A huge pyramid scam is busted in Calgary, Alberta.
    October 19, 2009

    Fraudcast Now On The Air

    A Canadian anti-fraud program is quite informative...
    May 24, 2009

    Calgary Legal Assistant To Spend 42 months In Jail For Embezzlement

    Legal Assistant misappropriates 1.4 million from Wills & Estates Trust Accounts...
    September 21, 2008

    Bayer Group Fined Over $3 Million For Price Fixing

    The Competition Bureau prosecutes a price fixing matter...
    November 07, 2007

    "4X Made Easy" Comes To Alberta

    Full page newspaper ads have appeared in Alberta promoting seminears for "4X Made Easy"...
    June 11, 2006

    Update - Quebec Based Lottery Method Scam

    An update on the National Research Institute Inc. scam...
    May 10, 2006

    International Research Institute Inc. Ads - Sun Newspapers

    Full page ads have appeared in Canadian newspapers today regarding a method to be successful at lotteries...
    May 06, 2006

    March is Fraud Awareness Month in Canada

    Enforcement agencies all over North America are impressively uniting to fight fruad...
    March 05, 2006

    Outrageous Smart Source Ads Continue...Maria Duval The Latest!

    Smart Source weekend inserts to Canadian newspapers have now reached a new low with fortune telling ads...
    January 13, 2006

    Mitsubishi Fined 1 Million Over Graphite Electrode Cartel

    The Competition Bureau announced Mitsibushi has been convicted in a cartel...
    May 23, 2005

    Telemarketing Calls Coming From Florida and Texas

    Consumers, largely from Ontario, have been concerned about travel telemarketing calls from the U.S....
    March 30, 2005

    Montreal Based Scam Targeting Australia Busted

    Canada's Competition Bureau completed prosecuting a winning prize scam from Montreal...
    March 17, 2005

    Competition Bureau Reaches Agreement With Auctioneers

    A Canadian auctioneer company, famous for outrageous ads, was in fact, too good to be true...
    March 10, 2005

    FTC Busts Fraudulent Fuel Saving Product

    FTC is going after a product promoted as a fuel saving item that does not save fuel...
    November 03, 2004

    Internet Harrassment Leads To Prosecution

    Cyber harrassment has led to what is believed to be the first ever prosecution for this...
    November 03, 2004

    Edmonton Bank Manager Guilty Of Huge Fraud

    A sad story of how untreated depression contributed to a major embezzlement...
    September 06, 2004

    FTC Busts Montreal Based Telemarketing Scam

    A telemarketing scam coming from Montreal, and targeted to seniors has been busted by the FTC...
    July 24, 2004

    Canadian Lottery Winnings - A Scam!

    Supposed Canadian Lottery winnings cost a California lady...
    July 18, 2004

    Major Internet Fraud Solved in Taiwan

    A Taiwanese man has been convicted of hacking into financial information...
    June 15, 2004

    U.S. Securities Fraud in the Billions Busted

    The U.S. authorities have settled a huge securities fraud with the company agreeing to refund millions...
    June 14, 2004

    Identity Theft Huge In The U.S.

    The amount of fraud by identity theft in the last 5 years is staggering...
    September 07, 2003

    FTC Charges Canadian Telemarketers

    A Calgary based telemarking operation to U.S. business's is busted...
    July 20, 2003

    Financial Scam Preys On the Honest People

    This U.S. scam asks people to repay overpaid internet sales, when the sale was initially bogus...
    May 21, 2003

    Finance Scams Target the Church of Latter Day Saints in Utah

    From Utah, here is a story about targeting a religious group with financial fraud...
    January 19, 2003

    Real Estate Agency Charged In $80 Million Dollar Fraud

    A real estate agency has been charged with fraud with respect to 400 loans...
    January 15, 2003

    Deceptive Jewellery Promotions Cutailed

    The Competition Bureau has charged Toronto area people promoting jewellery in a deceptive manner...
    December 20, 2002

    Teeth Whitening Scam Nets 6 Year Jail Sentence

    The Toronto teeth whitening scam we reported two weeks ago has resulted in a 6 year jail term...
    November 30, 2002

    Teeth Whitening Scam Busted In Toronto

    A consumer scam involving a bogus teeth whitening product is busted in Toronto.
    November 17, 2002

    Joint US/Canada Effort Shuts Down Canadian Office Supply Telemarkers

    A major joint effort by the Canadian Competition Bureau and the U.S. Federal Trade Commission shuts down Canadian Office supply telemarketing...
    November 17, 2002

    U.S. Officials After Canadians For A Money Transfer Fraud

    An all too common story these days, U.S. officials are after Canadians for fraudulent activity in the U.S....
    November 17, 2002

    Competition Bureau Shuts Down First Capital

    The Competition Bureau of Canada has shut down and charged an infamous credit card operation from downtown Toronto.
    October 28, 2002

    Fake Bank Scam Hits U.K.

    A scam involving a fake on-line bank hits the U.K.
    October 08, 2002

    Montreal Telemarketer Sued By Missouri

    The State of Missouri is taking on a Montreal based telemarketing firm, which was allegedly digging out financial info about Missouri residents.
    October 06, 2002

    Alleged Edmonton $10 Million Fraud Goes To Jury

    A trial involving an Edmonton man, using pay telephone services, from a few years back now goes to the jury.
    October 06, 2002

    Edmonton Bank of Montreal Manager Pleads Not Guilty to Fraud

    The latest on the Edmonton Bank of Montreal fraud case...
    August 23, 2002

    Bank Manager Charged In Edmonton Fraud

    This is the story about an Edmonton Bank of Montreal bank manager being charged with a multi-million dollar fraud...
    August 21, 2002

    B of Montreal Statement of Claim Details Alleged Fraud

    Documents from Bank of Montreal's Statement of Claim, filed in Edmonton Law Courts, detail the alleged bank fraud...
    August 21, 2002

    MultiMillion Dollar U.S. Immigration Case Busted

    A fraudulent U.S. immigration scheme in Virginia is busted...
    July 25, 2002

    Canadian Lottery Scam Proprietors Charged

    A telemarketing operation targeting international countries is charged...
    July 20, 2002

    Saskatchewan Livestock Ex-Employee Charged In Million Dollar Case

    Ex-employee charged in a suspected embezzlement case.
    July 19, 2002

    Montreal Telemarketing and Direct Mail Operation Convicted

    A Montreal telemarketing operation is convicted from an operation involving consumers to believe they won prizes...
    June 27, 2002

    Another Montreal Telemarketing Operation Convicted

    This Montreal telemarketing operation was selling business directories in a misleading manner...
    June 27, 2002

    U.S. Takes Action on Bogus Internet Auction Site

    The U.S. Authorities have actioned an internet site which takes $$ from victims, but does not deliver the items for auction...
    June 02, 2002

    Bogus Internet Directory Promotion in Canada Leads To Conviction

    The Competition Bureau In Canada Convicts a bogus Internet directory scheme...
    June 02, 2002

    Alberta Company Found To Contravene Competition Act Via Bogus Fuel Saving Device

    A supposed gas saving device is found to be bogus...
    June 02, 2002

    Four New Jersey Based Indian Nationals Charged in $600 Million Dollar Fraud

    Huge Story Out of Los Angeles - Banks defrauded huge money.
    May 17, 2002

    Two Montreal City Councillors Among Four Charged With Government Corruption and Fraud

    More Montreal Fraud...
    May 17, 2002

    Urgent – Major Credit Card Promotion Scam in Toronto

    If First Capital Consumer Group calls you, contact the FTC, or the Toronto Police...
    May 17, 2002

    Foreign Students Attending School in U.S. Charged With Getting Impostors to Write English Exams

    An interesting story about foreign students getting people to write English proficiency tests...
    May 09, 2002

    Montreal Telemarketers To Pay Back $111,000 to U.S. Citizens

    Another Montreal based telemarketing firm in trouble...
    May 03, 2002

    Maine Residents Lose Money To Montreal Area Lottery Scam

    There is serious concern about the number of telemarketing and similiar scams from Montreal right now...
    March 17, 2002

    FTC Charges Bogus Cell Phone Protection Patches

    The FTC has charged two companies marketing patches claiming to protect from cell phone radiation...
    February 22, 2002

    Late Night Psychic’s Crystal Ball Not So Rosy!

    The Federal Trade Commission is trying to shut down late night psychic "Miss Cleo"...
    February 17, 2002

    Sweepstakes Winnings Fraud Originating Out Of Toronto

    Consumers throughout the U.S. are receiving notices they receive by mail announcing they have won substantial sums of money…
    August 23, 2001

    To Top of Page

    Rainbow Investigations - The Investigative News
    Rainbow Investigations Now On Facebook

    In the first of a number of marketing intuitives planned for 2017, we have joined social media...
    Monday, January 30, 2017

    Concrete Equities Exec Convicted

    Another real estate promotor convicted of fraud...
    Saturday, October 01, 2016

    Calgary's Professional and Effective Court Agent

    In these tough times, you can count on us to do the best for you...
    Friday, January 22, 2016

    Alberta Lawyer The Latest To Be Sent To Prison For Mortgage Fraud

    A former Red Deer lawyer becomes the 14th Albertan sent to jail for mortgage fraud...
    Monday, January 04, 2016

    Foundation Capital Principals Face ASC Hearing Date

    Ron Aitkens and others from Foundation Capital getting heat from Alberta Securities Commission...
    Saturday, April 18, 2015





    PROVINCE OF ALBERTA:

    Private Investigation
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    PA 31659.06.00


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    Phone: (403) 245-0533 Cellular: (403) 651-9049 Fax: (403) 245-0544 E-Mail: investigator@rainbowinvestigations.com