State Authorities Clamping Down on Investment Scams

State securities regulators, in their latest crackdown on Southland investment scams they say cost U.S. consumers $3 billion to $4 billion annually, said Monday that they are conducting their largest-ever series of raids on high-pressure, “boiler room” telephone marketers.

Investigators from seven state securities agencies are conducting the searches, mostly in the Los Angeles area, which has become a hotbed of fly-by-night telemarketing scams hawking anything from phony gold mine deals to bogus oil and gas investments.

G. William McDonald, enforcement chief for the California Department of Corporations, which regulates securities firms in the state, said many of the raids were conducted last week but some were still being conducted today.

Details of the raids will be announced at a press conference Thursday in Los Angeles.

McDonald said authorities were concerned that advance disclosure to the news media before some raids were completed might encourage some boiler room operators to close up shop before being searched. But authorities concluded that the problem was minimal, he said.

“At worst, there is only a one-day problem in terms of news,” he said, noting that raids should be completed today.