Boiler Rooms

Discussion in 'Trading' started by youngtrader, Aug 6, 2008.

  1. Just finished the book Wolf of Wall Street which was written by Jordan Belfort. He ran Stratton Oakmont one of the biggest boiler room/pump and dump brokerages during the 90's. Pretty interesting stuff.

    Do these boiler rooms still exist or have they basically all been shut down do to the SEC cracking down? Anybody know of any firms that still do this type of sales trading?
  2. They're still around.

    One ticker symbol is MER. It's publicly traded.

    Complete boiler room.
  3. 50_Bip


    Back in the day, I worked for one called Morgan Stanley. Maybe you have heard of it. Glad those days are behind me!
  4. No it isn't. You have the newb brokers that have to cold call to build a book, but the vast majority is managing accounts in which they do not charge any commission. The entire industry is moving this direction, except for the online discount brokers. I used to be a broker, an have several friends that are now. None of them pump stocks or churn as they wouldn't make any money doing so. Most of the pump and dumpers are now involved with those newsletters that you probably all get promoting the next big penny uranium stock, etc.

    The big brokerages usually charge a % of the account's value assuming they have discretionary power to manage the account, so it is their interest to make it grow. My family has done biz with MER for 3 generations now, and they have done well for us.

    Firms like MER don't have much business with the customer calling all the trades anymore because the discounters simply undercut them.
  5. JOEY O

    JOEY O

    i hate to quote things out of investopedia.. but I saw this awhile back and thought it was interesting:

    <i>Boiler-room methods, if not illegal, clearly violate the National Association of Securities Dealers' (NASD) rules of fair practice. The North American Securities Administrators Association estimates that investors lose $10 billion a year - roughly $1 million an hour - to investment fraud promoted over the telephone. </i>

    so, 10 bil a year... yeah, I would say they still exist.

  6. lol yea that book was interesting.

    You know scorsese and dicaprio are doing a movie based on it?

  7. Yeah I did hear something about a movie. Any idea on when its coming out or if there is any details on it yet? Should be a pretty awesome movie!

    lol I highly doubt MER is involved in pump and dump activities but you never know I guess.

  8. his wife cracks me up in that book

    jordan:"why don't you just get out of here"

    wife: "I could do that, or I could just stay here and kick your fuckin ass"

  9. hughb


    I was wondering about this myself. I posted asking if anybody knew of any boiler rooms still out there in the movie thread while discussing the movie Boiler Room, but some mod deleted it. I don't get these mods....

    Anyway, I just dialed the number of an old boiler room that used to be here in San Diego and it's number is disconnected. It was Chatfield Dean. I don't know if the whole company is gone, or just the San Diego office.
  10. JOEY O

    JOEY O

    The only thing better than the movie boiler room, is watching it on WGN. They have to edit the vulgarities... My favorite quote from the edited showing was afleck's line of, 'act like you got a nine inch rock.' pretty funny, especially when 'rock' isn't even afleck's voice.
    #10     Aug 6, 2008