If an overseas broker calls you out of the blue to sell you shares, you don’t need to ask – it is a scam.
Two months ago Ross received a call from a trader supposedly working for a Shanghai-based stockbroking firm. Ross was told that he had been identified as a potential blue chip client and that the firm, Foerster Consulting, wanted to introduce him to offshore trading.
Ross informed the trader that he was not interested but soon received a phone call from ‘David Huntley’ a South African working for the firm. Huntley told him they had a hot tip they wanted to share with him. Again Ross refused and told them he did not do business on the phone. He then received a call from Huntley’s senior manager ‘Robert Maxwell’, who spent an hour on the phone with Ross trying to convince him to trade with them.
“I was suspicious that they were spending so much time pushing me. I earn an ordinary salary; I am never going to trade large amounts of money. But they were very convincing, they are very good sales people,” says Ross, who eventually gave in and agreed telephonically to buy over R70 000 worth of shares in a company called Suncor Energy.
The company sent him confirmation and wanted him to transfer the money. At this point Ross started to get cold feet. He realised that he had just entered into an agreement with people he did not know and that he had no proof that he had actually bought these shares except for a piece of paper they had emailed to him.
He tried to cancel the deal and then they got heavy. ‘Jim Dawkins’ their so-called legal officer threatened him with legal action.
“They said they would use a debt collection agency and blacklist me if I didn’t proceed with the transaction. They also said they can use ‘voice biometrics’ against me in court with the verbal consent I gave,” says Ross. After being harassed daily with phone calls and threats, Ross contacted City Press for help. He wasn’t sure what to do, but it was obvious he had fallen for a scam.
There are various types of trading scams. In some cases the shares are not actually bought and the entire transaction is a scam. In a boiler room scam, however, there are actual shares; it is just that the investor is overpaying for the shares and being used to manipulate the share price.
The term “boiler room” is used to describe an outbound call centre that sells dubious investments by telephone and is often used to create a market for a share by attracting buyers which in turn drives up the share price.
This usually happens when a company is listing and wants to boost their share price by creating buying activity. As Ross confirmed, Suncor Energy was the only share ever mentioned in any of his discussions with the traders.
Clients are usually told after the sale that they are not allowed to sell the shares they have invested in for a specific time period. What they do not tell the client is that there is no real market for the shares, so if the client tried to sell, the price would fall as there is no support for it.
The ultimate benefit of the scam is for the owners of the listed company who are usually involved with the company running the boiler room. They are now able to sell their shares at a profit as the boiler room has created a market for the shares out of duped investors. Once the owners have sold to the investors, the investors would suddenly discover that the shares they bought are worth half what they paid for them.
It is very hard to prosecute these types of organisations as they always operate outside the legal jurisdiction of their investors. In Ross’s case this can also work to his advantage as they have no legal recourse to hold him to his agreement.
How to spot a scam:
- They will only discuss one share and try to convince you that it is the hottest tip ever. Take a moment to think about it: despite being the hottest tip on the planet they called someone they do not know, thousands of kilometres away, and spend an extraordinary amount of time convincing you to buy the share.
- No legitimate stockbroker would trade for a new client without the cash up front.
- They may flatter you by telling you that you are a blue chip client with whom they want to cultivate a relationship – are you really worth it?
- The website will lack “depth”. While Foerster Consulting does have a website, it does not contain the level of detail that one would expect from a successful international brokerage.
- The names of the individuals are usually fictitious. In this case they drew on traditional upper-class British names to give the victim the feeling that they are dealing with someone credible.
Hi Maya. I don’t know whether this feed is still happening. I was scammed by Foerster Consulting in 2013. Same MO. We’ve tried to no avail to get our R50,000.00 back. Knowing we’d never see that money again we let it go.
Recently I received a call from a UK attorney who claims that Foerster has liquidated and they can get us our money back. All we need to pay is 5% of what they get back to us. I needed to complete forms and email them back. This attorney has been calling me weekly for the past 4 weeks. Has anyone else had this? Not sure whether to trust them. It would be nice to get my money back, but at the same time when I mentioned this company are thugs and a scam he said that they’re not really which is making me a little suspicious.
Given the history of the company I agree you need to be careful. It has been a long time since I’ve heard from anyone about the scam but let me check my records and see if I can find out some of the other people that were scammed. Just read the forms very carefully and see if there are any liabilities or obligations you are agreeing to
http://www.youtube.com/watch?v=IX52NK46XFA this explaines them on youtube..soon their voices will be heard on there
HELLO to you who are allready fooled and you who suspect the Foerster Consulting company.
There are many more fooled by Foerester Consulting for example I.
I am from Finland and I am betrayed also.
They use many people (the names are probaply not real) in their operations; I have talked with following people:
gary.cohen@foerstermail.com
john.moore@foerstermail.com
paul.godfrey@foerstermail.com
chris.page@foerstermail.com frank.price@foerstermail.com
They promise good profits but finally you find out that you can not get any money out of their company.
I paid my money to an Romanian account.
Does anyone has any further knowledge of their real operational location / country?
Or any otherinformation?
Betrayed
Unfortunately my husband has been taken for a ride by This Gary person too…even this morning he is still trying to persuade my poor hubby to hand over cash to make the problem go away…we of course will not hand anything over…
Can I also warn readers of Alliance Direct Management, based in New Dehli..this is also a scam…
Some of the readers who have been caught in this scam keep me up to date with their dealings. In all cases the broker tries to get you to pay more money to them in order to get your original money out – they just keep trying to find new ways to fleece their victims!
it is so true Maya… even if my husband says there is no money they speak of, restricting the shares that he bought for 3 years! Iv been screaming its a scam for months, but my husband thought they were genuine, until I found this article to persuade him otherwise..
2013/06/26
Hi Maya
Foerster Consulting:
Consultants Jack Parker
Henry Wintermann Allocations Officer
Charles Bryant Head of Corporate Division
Gary Cohen Senior Vice President of Trading
I was first contacted by Jack Parker who outlined the future of trading with Suncor shares. They were very strong in Canada in extraction of oil etc from earth. The main future was the possibility of the USA approving of an oil pipeline from Alberta to the USA. This is a fairly long term project and they expected an increase in share prices of at least 40 – 60 % within the next four months. Once purchased then I would have to hold onto them for 60 days before selling them. He tried to convince me to purchase 1180 shares. On checking the internet there was also a strong buy for the shares. In the end I decided to purchase 165 shares at USD 30.65. Henry then contacted me and sent me the following papers to complete and sign. These were 1.) Account application form 2) W-8Ben form and the bank information as to where the funds were to be transferred namely Alfa Bank Romania. The funds were transferred on 4th March.
During May I was contacted by Charles who gave me a long story about how he could let me have BGCP shares at $4.09 which was at the moment trading at just over $5.00 after being phoned on a daily basis and as to how good these shares were I was convinced to purchase 5000 shares. The funds were transferred on 17th May = $20654.50. At this stage I was having my doubts about the whole transaction. I have an official receipt from Foerster dated 20th May for the $20654.50 for the 5000 BGCP shares.
Not long after this Charles contacted with a proposal that I sell both SU & BGCP shares and purchase 6000 ACAD shares at $11.50 per share He mentioned that SU did not seem to be going anywhere. This would mean that I would have to deposit a further $36269.25. He had sent an order confirmation dated 28 May for this amount. I told him that I was not interested. He then suggested that I may be interested in half the amount. I in my naivety said that I may be thinking that he meant half the number of shares. I then received an order confirmationdat5ed 29th May. This one quoted the sale of 165 SU shares at $30.96 and the sale of 50000 BGCP shares at $5.72. The purchase of 4500 ACAD shares at $11.50. He explained that ACAD (Acadia Pharmaceuticals) shares would climb considerable because of their medical research into a drug which would be effective against Parkinson disease. He mentioned that he had placed a “put” on the share at $12.50 so that if it dropped to this level it would be sold at once thus guaranteeing me a profit of $4500 less commission. To this I replied that I would have to discuss this with my wife. He immediately took umbridge to this, ranting that who was I to discuss this with my wife as he had already made me a profit of $8000 on the 2 above shares. In fact I believe that he slammed the phone down on me. I never again heard from him.
About a week later I was phoned by Gary who wanted to know when I was going to transfer the funds. I mentioned that I was not happy with the situation and noted my displeasure with the way Charles had carried on re my wife during our last telecom. He mentioned that Charles had that day been very distressed re occurrences in his family and had left for the USA in order to clear up matters. I also discussed the fact that I would be pleased to receive an indication as to who owned the company, Foerster Consulting, who were the board members and who was the chairman of the board. The website gave very little information re the company. He mentioned that this was a principal of the firm. I also wanted a guarantee as to when the stocks was sold that I would my money. No definite answer. I have not signed the order confirmation and I have been given until end of June to transfer the funds. I am loath to transfer the funds and especially after reading your recent article on Foerster Consulting. I know that you can’t advise me as to what to do but I would appreciate your opinion.
• Do I transfer the funds and hope that i will get whatever the stock is sold at
• Do I withhold the funds and accept the consequences that I will lose everything and as Gary put it do I have enough money to fight a claim.
•
Unfortunately there is very little I or the South African authorities can do as this falls outside South African jurisdiction. You can report them to the Financial Services Board but that would primarily be to highlight their activities and to warn people.Based on your experience and other complaints from readers about this firm I would certainly not recommend you send any further funds.
What ever you do, don’t send them anymore money.
I have been scammed by these people as well.
Same scam, same shares, same amount.
I have sent them a copy of this article (they would have found it anyway) and never heard from them again.
They won’t answer my emails and/or calls, so I am afraid i have lost the money, as you probably have.
I am sorry to be the messenger of such bad news.
I have notified Market Abuse within the FSB of these fraudsters. As said before it would fall outside of SA jurisdiction but perhaps international authorities are looking into them
Frank, please contact maya and she will give you my email address and mobile number so that you can contact me. I believe that we should stand together and discuss our problems together. Thank you
I did, a few days ago.
Hi Frank and aurthurcharles ..seems that the 3 of us have been scammed…:o( I wish I would have found this site earlier..I have been searching to see if this was a scam for ages but found nothing.. so my husband assumed they were legit!!!!
I have to say that unfortunately I was also scammed. The approach was very similar on what was described above (Suncor shares and that guy Gary Cohen) and I sent them more than 30.000€. What can be done about these crooks?
Oh my gosh, reading this is like dejavu! Exactly the same thing happened to us. I have been contacted by all the people mentioned. I was even told that the one broker’s family was ill in the UK and that is why I am not able to get hold of him. I was first contacted by Jack Parker, then Paul Godfrey and Gary Cohen. John Moore was the last “broker” who contacted me. He actually asked me for my account details to refund my money. They also said they were going to invest my money in Suncor. I requested a certificate proving that the stock was bought to no avail. They sent me another brochure in the post instead and proceeded to contact me a month later to TELL me to invest more money with them. All I have is an invoice for the amount I invested. I can’t believe I was scammed.