A boiler room is a scheme in which sellers use high-pressure selling tactics to persuade investors to buy securities, including speculative and fraudulent securities.
Most boiler house sellers contact potential investors through cold calls.
Some well-known boiler house tricks include statements that the investor cannot easily verify, demanding immediate payment or threatening in case of non-compliance.
These methods, if not illegal, clearly violate the good practice rules of the National Association of Securities Dealers (NASD).
Boiler room sales tactics are also restricted by Securities and Exchange Commission Rule 10b5, which prohibits dealers from making false statements, omissions of material facts, or other deceptive acts.
Black money includes all funds earned as a result of illegal activities, as well as other legitimate income that is not taken into account for tax purposes.
Channel stuffing refers to the practice of a company supplying more products to distributors and retailers through a distribution channel than end users can purchase in a reasonable amount of time.
A High Yield Investment Program (HYIP) is a fraudulent investment scheme that aims to generate extremely high returns in excess of 100% on investments.
A letter scam in Nigeria is a scheme in which a sender offers someone a commission - usually via email - for helping them transfer a large amount of money.
Racketeering is the acquisition of a business through illegal activities, the conduct of a business with illegal income, or the use of a business to commit illegal activities.
A fraudulent trader is an employee of a financial firm who engages in unauthorized, often high-risk activities that result in large losses for the firm.