What is a boiler room in securities fraud?

A “boiler room” is a term used to describe an illegal operation in securities fraud. This kind of fraud occurs when a group of people attempt to deceive potential investors into buying worthless stocks or securities. Boiler room operators use high-pressure sales tactics, such as making repeated phone calls and promising abnormally high profits, to induce people to buy their stocks. Boiler rooms are often set up hastily, with little to no oversight, and employ unlicensed workers who don’t have any expertise in the stock market. The fraudulent activities conducted by boiler rooms often result in investors losing their funds. In California, securities fraud is a serious crime and all individuals found guilty of such fraud may be fined, jailed, or both. Additionally, the California Department of Business Oversight (DBO) is responsible for enforcing the state’s securities laws. The DBO has the power to investigate and prosecute cases of boiler room fraud. The DBO also provides educational resources on different types of investment fraud, such as boiler room fraud, to help people protect themselves and their investments.

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What is a boiler room in securities fraud?

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