Press Contact: John J. Nester (202) 942-7083 SEC and State Securities Administrators Issue "Cold Calling Alert" Consumers warned about stock market phone fraud in bull market
The SEC and NASAA issued a 1997 Cold Calling Alert warning consumers about fraudulent boiler room phone schemes that pressured victims with false promises of guaranteed returns and confidential stock tips, as cold calling complaints surged 23%—though no specific individuals were charged, regulators urged the public to hang up and report scams.
In September 1997, the SEC and NASAA jointly issued a Cold Calling Alert to combat rising telephone investment fraud during a bull market, identifying boiler room operations that used high-pressure scripts to deceive consumers. The scams typically involved unsolicited calls promising guaranteed returns, confidential information, or 'hot stocks,' while refusing to provide written materials—tactics that led to a 23% year-over-year increase in complaints, making cold calling the fastest-growing category of securities fraud. Although no specific defendants or dollar losses were named, the alert empowered consumers to hang up, demand removal from 'do not call' lists, and report abuses to federal or state regulators.
In September 1997, the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) issued a joint 'Cold Calling Alert' to warn consumers about a surge in telephone-based investment fraud fueled by the bull market. The alert exposed common boiler room tactics, including aggressive, scripted cold calls that falsely promised guaranteed returns, confidential stock tips, or 'hot' investment opportunities while refusing to provide written documentation. Cold calling had become the fastest-growing category of securities complaints, with a staggering 23% increase that year, according to SEC officials. Although no specific individuals or firms were named or charged, the alert emphasized that these scams were widespread and often originated from operations using banks of telephones to target as many victims as possible. The agencies urged consumers to immediately hang up on such calls, demand to be added to any company's 'do not call' list, and report suspicious activity to the SEC or their state securities administrator. A free copy of the alert was made available via a toll-free number and online at sec.gov to help the public recognize and resist these deceptive practices. The initiative was purely educational and preventive, aiming to reduce victimization by empowering consumers with knowledge and actionable steps rather than pursuing legal action against specific perpetrators.
Extracted insights
- person cold calling abuses
- person cold calling alert
- person cold calling alert brochure
- person cold calling complaints
- agency director of sec's office of investor education and assistance
- agency fastest-growing category of sales-related complaints to sec
- person john j. nester
- person mark griffin
- person nancy smith
- person nasaa president
- person press contact
- person release date
- agency Securities and Exchange Commission
- SEC issued Cold Calling Alert brochure
- NASAA issued Cold Calling Alert brochure
- Cold Calling Abuses represent fastest-growing category of sales-related complaints to SEC
- Cold Calling Complaints increased 23% this year
- Nancy Smith is Director of SEC's Office of Investor Education and Assistance
- Mark Griffin is NASAA President
- John J. Nester is Press Contact
- SEC warned consumers about stock market phone fraud
- Release Date is September 22, 1997
- Cold Calling Alert available starting September 22, 1997
FOR IMMEDIATE RELEASE 97-77 Press Contact: John J. Nester (202) 942-7083 SEC and State Securities Administrators Issue "Cold Calling Alert" Consumers warned about stock market phone fraud in bull market Washington, D.C., September 22, 1997 -- Warning that bull markets always bring out the crooks, the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) are telling consumers to hang up on aggressive strangers selling investments over the telephone. The SEC and NASAA have jointly issued a "Cold Calling Alert," a brochure which cautions consumers to beware of stockbrokers who call you up, pressure you to buy, say they have "confidential" information, promise spectacular profits or "guaranteed" returns, or refuse to send you written information. All are warning signs for fraud. Cold calls are often made from "boiler rooms" by brokers using banks of telephones to reach as many people as quickly as possible. The Alert reminds consumers of their rights, and tells them how to put a stop to cold calls "whether annoying, abusive or downright crooked." Cold calling abuses represent the single fastest- growing category of sales related complaints received by the SEC, according to Nancy Smith, Director of the SEC's Office of Investor Education and Assistance. "This year's 23% increase is staggering when you consider most other complaints are down," Smith said. "We need to get rid of the boiler rooms. People need to hang up on bad brokers, and report them to the SEC or their state's securities administrator." Smith added that firms must put your name on their "do not call" list if you ask. "Today, too many Americans are being tricked out of their hard-earned savings by high pressure, scripted telephone cold calling techniques," said NASAA President Mark Griffin. "If you or anyone you know has ever been disturbed during dinner or another time by a persistent cold caller touting some `hot stock,' this brochure will help you fight back." Starting Monday (9/22/97), consumers can get a copy of the "Cold Calling Alert" by calling the SEC's toll free information line (1-800 SEC-0330). An on-line version is available on the SEC's website (www.sec.gov). # # #
FOR IMMEDIATE RELEASE 97-77 Press Contact: John J. Nester (202) 942-7083 SEC and State Securities Administrators Issue "Cold Calling Alert" Consumers warned about stock market phone fraud in bull market Washington, D.C., September 22, 1997 -- Warning that bull markets always bring out the crooks, the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) are telling consumers to hang up on aggressive strangers selling investments over the telephone. The SEC and NASAA have jointly issued a "Cold Calling Alert," a brochure which cautions consumers to beware of stockbrokers who call you up, pressure you to buy, say they have "confidential" information, promise spectacular profits or "guaranteed" returns, or refuse to send you written information. All are warning signs for fraud. Cold calls are often made from "boiler rooms" by brokers using banks of telephones to reach as many people as quickly as possible. The Alert reminds consumers of their rights, and tells them how to put a stop to cold calls "whether annoying, abusive or downright crooked." Cold calling abuses represent the single fastest- growing category of sales related complaints received by the SEC, according to Nancy Smith, Director of the SEC's Office of Investor Education and Assistance. "This year's 23% increase is staggering when you consider most other complaints are down," Smith said. "We need to get rid of the boiler rooms. People need to hang up on bad brokers, and report them to the SEC or their state's securities administrator." Smith added that firms must put your name on their "do not call" list if you ask. "Today, too many Americans are being tricked out of their hard-earned savings by high pressure, scripted telephone cold calling techniques," said NASAA President Mark Griffin. "If you or anyone you know has ever been disturbed during dinner or another time by a persistent cold caller touting some `hot stock,' this brochure will help you fight back." Starting Monday (9/22/97), consumers can get a copy of the "Cold Calling Alert" by calling the SEC's toll free information line (1-800 SEC-0330). An on-line version is available on the SEC's website (www.sec.gov). # # #