“Boiler room” fraudsters ordered to compensate 75 investors

Victims of the scam have not been able to recover their investments.

The Court of First Instance has granted orders for “boiler room” fraudsters to reimburse 75 investors who fell victim to the scam, the Securities and Futures Commission (SFC) reported.

The “boiler room” scam, according to the SFC, is a securities scam in which fraudsters pretend to be licensed securities or futures broker, and cold call individuals to offer fictitious shares or futures.

The three unlicensed entities, engaged in the “boiler room” scam were the Broadspan Securities, Shepherds Hill Partners, Hong Kong, and Rich Futures (HK) Limited.

They were using the following websites, respectively: www.broadspansecurities.com; www.shepherdshillhk.com; and www.richfutureshk.com 

“The three unlicensed entities solicited investors through cold calls to open trading accounts via their websites and to invest in securities and/or futures in 2014,” the SFC said.

“They also asked investors to deposit funds purportedly for their investments into six bank accounts in Hong Kong.”

The SFC had obtained in December 2014 interim injunctions ordering to freeze the monies in the six bank accounts that kept proceeds from the scam by the three entities.

Later in January 2015, the SFC also obtained a restraining order to keep the entities from continuing their activities and suspend their websites.

“The Court has appointed administrators to receive and distribute the proceeds of the boiler rooms frauds remaining in the six bank accounts – approximately a sum of $4.3m – for the benefit of the investors on a pro rata basis,” the SFC said.