Boiler Room (2000) is a film starring Giovanni Ribisi and Vin Diesel (pictured), set inthe world of underground brokerages (also known as boiler rooms). To the distaste of his father, college dropout Seth (Ribisi) makes a living by running an illegal casino in his house. One of his customers persuades him to apply for a job at brokerage JT Marlin.
Seth quickly learns the brokerage is a scam, selling penny stocks in dubious companies to investors using high-pressure sales techniques. Disillusioned, Seth tries to set up a scheme to destroy the brokerage, which backfires, leading tohis father and him facing arrest.
The key moment
Lessons for investors
Being scammed by a boiler room isn't the end of the pain for some victims, who are then approached by people posing as "asset recovery firms". The companies inform their victims that they have been cheated, but promise that they can recoup the losses incurred in return for an upfront fee. Naturally, once the money is paid over, neither the firm nor the cash are ever seen again.It should go without saying that you should avoid anyone who makes such an offer.
Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
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