A Peak Inside the Boiler Room
I got another boiler room broker call today, so I guess the recent downturn has not flushed out all the cockroaches. A while back I discussed the frequent calls I get from boiler room stock promoters. The approach they use with me is this:
So the other day, I accidentally let one of them go further than I usually allow. He said he was from Olympia Asset Management. (There is an Olympia Asset Management web page, but I don't know if it is the same company and the web page has not been updated for several years.) I let him run for a bit because a friend of mine runs a very well-respected financial planning firm with a different name but also with Olympia in the title, and for a moment I thought it might have been one of his folks.
Anyway, he proceeds to try to convince me that we have talked before and discussed a certain security. "Remember me, we talked six months ago about ____". Of course, I had never heard of the guy. At this point I usually hang up, because I have heard this crap before -- it is a common pitch.
Its pretty clear to me now that this is what he is doing:
- Trying to imply that we have some kind of relationship we actually don't have. Or worse...
- Trying to convince me that he touted stock A six months ago, so now he can tell me stock A has gone up in price. Many reputable brokers built their reputation by cold calling people and saying: Watch these 3 stocks and see how they do and I will call you back in 6 months. That way, you can evaluate their stock picking without risk. The modern sleazy approach is to pick a stock that has gone up a lot in the last 6 months, and then call some harried business person and pretend you called them with that pick 6 months ago, hoping that they will give you the benefit of the doubt.
The call just went downhill from there. I hung up after his discussion of throwing Molotov cocktails into the cars of people he doesn't like. That was right after I asked him if Tony Soprano was standing beside him listening in on the call.
Anyway, beware. The guy today called me and asked me if I remembered him calling 6 months ago predicting the downturn in the mortgage market and the crash of the financial stocks. You are not crazy - no matter how certain the guy seems, you really did not talk to him 6 months ago.
By the way, I am not the only one getting this pitch. Ed Moed got the same pitch from the same script from the same company. Many of his commenters share similar experiences.
Update: Wow, they sure do like Mitt Romney over at Olympia Asset Management. I'm sure there was no arm-twisting here, when every single employee of the company seems to have given the max donation to the same candidate, with no breaking of ranks.
Update #2: Mike Murphy, CEO of Olympia Asset Management, was "a member of the [Hoffstra's] elite football team." Wow. Remember that time Hoffstra ripped through all those SEC teams? Yeah, neither do I. Anyway, this achievement does not hold a candle to the fact that I was once captain of Princeton Tower Club's elite intramural coed field hockey team.
Posted on November 13, 2008 at 10:33 AM | Permalink
Could be worse.
I actually did get an unsolicited call from a rep where I have my on-line brokerage account about six months ago asking why I had so much of my account in money markets, and couldn't he help me invest it in some higher return stuff.
Posted by: diz | Nov 13, 2008 1:06:29 PM
Many reputable brokers built their reputation by cold calling people and saying: Watch these 3 stocks and see how they do and I will call you back in 6 months. That way, you can evaluate their stock picking without risk.
But did they give every customer the same three stocks? A classic scam is to send out different predictions to a bunch of different prospective customers, so that no matter what happens someone will think you're a genius.
Posted by: Brandon Berg | Nov 13, 2008 7:53:52 PM
Brandon, that's great. I love scams.
Posted by: Scott | Nov 13, 2008 10:38:02 PM
If you look at the GPAs, maybe Hoffstra's football team is elite. But that's the only possible criteria that would allow that statement to possibly be true.
Posted by: Greg | Nov 16, 2008 12:04:20 AM
About your title: A "peak" is the top of a mountain. A "peek" is a quick look.
Posted by: markm | Nov 16, 2008 6:52:21 AM
What I do is play along, not to keen, but interested, always letting them phone me. If they are wasting time with me -I may be preventing them stealing from someone else.Get their money forwarding bank details, then cut + paste to the financial regulator, the police in that city and to the complaints dept of the bank., saying the company involved is laundering stolen money through this account.
Posted by: Adrian | Nov 16, 2008 12:05:02 PM
How does the sleezy firm Olympia Asset management continue to operate? I seriously would have thought Murphy would have bought it on this last downturn. While I know Olympia Asset management has lost investors $$millions, it just shows the sheer power of persistence and youthful vigor...namely, if you continue to call, you can stay afloat. I'm surprised the SEC hasn't shut Olympia Asset management down by now. Its such a chop shop. Instead of investigating guys like Mark Cuban, the SEC needs to turn its attention to Olympia Asset Management. Fine Murphy, get the IRS to go after Murphy for tax evasion and be done with it.
Posted by: AR | Nov 22, 2008 12:45:41 AM
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Posted by: WelfDosegrore | Apr 27, 2009 6:30:00 PM
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