Boiler room stock scams on the rise

The International Organization of Securities Commissions said on Thursday that boiler rooms that use high-pressure sales strategies to push junk stocks on unsuspecting consumers are a serious global problem.

Like many other scams, many boiler room operations are small-scale fly by night cold calling rooms that can be set up anywhere in the world and then moved around in a flash.

While regulators fight an uphill battle to take on these crooks -- who generally promote thinly-traded penny stocks with false claims and baseless predictions -- it's fairly easy for investors to protect themselves. Repeat after me: I will never, ever, ever make any investment decision based on a phone call from a stranger or an email from someone I don't know.

No one is going to call you out of the blue to offer you a stock tip that can make you rich -- If it's such a great tip, why do they need your money? Why don't they just keep the shares for themselves?

For a great cinematic representation of fraudulent stock promotions through cold calling, check out Boiler Room.

Read Full Story

Can't get enough personal finance tips?

Sign up for Finance Report by AOL and get everything from consumer news to money tricks delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.