Hong Kong Court Orders Boiler Room to Compensate Victims

A Hong Kong court has passed a recent judgment against the boiler room fraudsters and ordered the perpetrators to compensate 14 victims.
The case was brought to the court by Hong Kong’s financial watchdog agency the Securities and Futures Commission () against three unlicensed entities – Cardell Limited, Waldmann Asset Management, and Doyle Hutton Associates. According to the SFC, all the three scammers claimed to have based in and operated from Hong Kong and solicited investors through emails and cold calls to open trading accounts. They further pushed the victims to invest in securities and futures products via their websites at various times in 2014.
The fraudulent entities also held accounts in four Hong Kong-based banks – Cedan Limited, Hamtron Limited, Cardan Limited, and Cardan Limited – and even asked the victims to deposit funds directly in these accounts.
The SEC surfaced that none of the trades in securities and futures agreed with the affected investors were ever executed on any recognized exchange.
In January 2016, the watchdog agency had received interim injunctions from the court to freeze the funds in the accounts held by the fraudsters in all the four banks.
The court, further, found the banks to have aided and assisted the unlicensed firms in pulling the boiler room scam.
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In 2015, multiple banks were accused of laundering cash worth hundreds of millions obtained by Thailand and Philippines-based boiler room fraudsters. In those scams, thousands of investors, primarily from America and Europe, were duped for years.
Earlier this year, Financial Services and Markets Authority (FSMA) issued a warning against the unauthorized activities of multiple boiler rooms that are offering investments in the country without complying with Belgian financial legislation. The agency, further, released a list of 7 operators suspecting their engagement in fraudulent investment tactics.