Investor's Watchdog.com: Stock, finance and investment protection for investors

The U.S. Securities and Exchange Commission (SEC) took quick action to shut down what it claims is an ongoing fraud involving the sale of stock in a company called Amante Corporation (Amante).  According to the SEC, a related company, called Amante Commonwealth Capital Management, Inc. (Commonwealth), sold Amante stock out of a boiler room in Lauderdale by the Sea, Florida.  According to the SEC, the people behind the Amante companies are Edward M. Denigris of Ft. Lauderdale and William D. Dyer of Pompano Beach.

The Commission’s complaint alleges that, from at least at least May 2008 to the present, Amante, Commonwealth, Denigris, and Dyer raised at least $2.3 million from investors by offering and selling Amante common stock in unregistered transactions. According to the complaint, defendants told investors that an initial public offering (“IPO”) of Amante’s stock was imminent, and that once the stock began trading publicly, the price per share could increase as much as one hundred times. These claims were false or misleading because Amante had not filed a registration statement or conducted any other necessary steps to even begin that process. In addition, there was no basis for the defendants’ statements about the high returns investors would realize on their investment in Amante stock because those statements were predicated on a fictitious IPO and Amante has no current or future business prospects to support such an increase in its stock price. The complaint also alleges that Commonwealth, Denigris, and Dyer acted as unregistered broker-dealers in selling Amante shares to investors. Moreover, Denigris misappropriated the majority of investor funds both by making large, undisclosed transfers to himself for personal expenses and transferring money to individuals working at Commonwealth.

Boiler rooms are an indicator of just how at risk investors are.  There is no elaborate sales presentation.  There is no meeting in the investor’s home.  There is just a large room with a bank of telephones from which young salespeople go dialing for dollars.  The hallmarks of a boiler room are blatant lies about what the brokers are selling, combined with high pressure sales tactics.  You would be surprised to learn just how many brokerage firms use boiler room operations.

To protect what you have worked so hard to earn and save, you must learn all you can about the broker who claims to be able to grow your nest egg.  Neither he nor his trade group (FINRA) will tell you everything you need to know.  To protect yourself, do what banks do when they move cash: hire private protection.