A man has been jailed for two years in Britain for a share scam that swindled 32 people out of 270,000 pounds ($440,400) in the first criminal conviction for "boiler room" fraud secured by the financial regulator. David Roger Griffiths Mason on Tuesday pleaded guilty to 13 counts of carrying on a regulated activity without authorisation, one count of making false or misleading statements and three counts of money laundering.
He was banned from being a director for six years. Judge Geoffrey Rivlin said Mason acted with "blatant and ... ruthless dishonesty" by co-ordinating the scam that persuaded people to buy shares in a company called EduVest Plc in the believe it would be listed on the junior PLUS UK stock exchange.
The Financial Services Authority (FSA) estimates that boiler-room scams - which often rely on cold-calling people and use high pressure sales techniques to sell overpriced, illiquid or non-existent stock - cost Britain 200 million pounds a year. The regulator, which has spearheaded a crackdown on market abuse but is struggling to combat unauthorised and often overseas-based share fraudsters, recovered the 270,000 pounds last year in a rare feat. It welcomed the sentence. "This sentence sends a clear message that the court takes boiler room offences seriously and will hand down significant sentences to those involved in them," acting enforcement and financial crime director Tracey McDermott said.