Modern Boiler Rooms
A fictional "boiler room" brokerage firm was dramatized in the 2000 film Boiler Room, and the play and film Glengarry Glen Ross show a similar boiler room operation selling real estate.
Although many disappeared in the 90s following the burst of the "dot-com bubble", many boiler rooms still operate across the world. Advances in telecommunication technology mean that a company can viably operate in one country while calling prospective investors in another. The advantage of such an operation is that a company can operate without fear of prosecution from the investor's native legal system. For example, many boiler rooms contacting prospective investors in the UK will operate from Spanish cities such as Barcelona and Valencia.
With the advent of the internet and ability to easily create web sites without any regulation and operate from other jurisdictions, boiler rooms have continued to operate into the 21st century. It is easy for scammers to set up a web site on one country, operate from another country and target victims in a third country, hiding their identity and making it difficult to trace them. Financial regulation vary significantly from country to country and some countries deliberately promote low regulatory environments to attract financial business making it easy for boiler rooms to use this to their advantage. Financial Regulatory Authorities in each country have significant difficulty enforcing rules on scammers in other countries. With low financial literacy by investors or victims, particularly in the way global financial markets operate and without better coordination between financial regulators in different countries, boiler rooms continue to operate.
Read more about this topic: Boiler Room (business)
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