Movie "Boiler Room" Wins "Thumbs Up" from Top State Securities Cop

WASHINGTON (February 1, 2000) – The soon-to-be-released motion picture “Boiler Room” won praise today from the nation`s top state securities cop for shining the spotlight on a criminal subculture on Wall Street that has stolen hundreds of millions-perhaps billions-of dollars from investors.

“[Writer-director] Ben Younger deserves to be commended for this realistic, insider`s view” of crime at a fly-by-night brokerage firm. “A movie in the multiplex reaches a far wider audience than securities regulators can ever hope to,” says Bradley Skolnik, Indiana`s Securities Commissioner and president of the North American Securities Administrators Association (NASAA).

The movie, to be released on February 18th by New Line Cinema and starring Ben Affleck and Giovani Ribisi, focuses on the “boiler room boys” at a fictional Long Island “bucket shop,” J.T. Marlin. College drop out Seth Davis (Ribisi) is lured by J.T. Marlin`s chief recruiter (Affleck) with promises of big commissions for selling dubious stocks over the telephone. The boiler room boys alternately charm, manipulate and bully their prey. “If you don`t want a piece of this action, you`re not alive,” goes a line from the movie`s web site, mimicking the aggressive tone of a boiler room broker.

As is typical in so-called microcap stock fraud, the buyers are charged huge (and illegal) commissions, and once the price of the “house stock” is driven high enough, insiders sell, making big profits for themselves and often wiping out the savings of investors.

“What we want people to take away from this movie is this: These boiler room operations simply steal people`s money by lying. These aren`t investment houses, they`re criminal enterprises and we`re committed to putting the people behind them behind bars,” says Skolnik.

In recent years, state, industry and federal regulators have cracked down on notorious microcap stock brokerages such as Stratton Oakmont, A.R. Baron and Duke & Company.² Brokers and principals at those and similar firms have been convicted and sentenced to prison. While the big microcap boiler room operations have been shut, the problem remains serious. “Some boiler room crooks simply moved across the street and set up smaller operations,” says Skolnik. “Others moved into `off market` investment schemes like phony prime bank notes, foreign exchange trading programs or other scams.³ The New York City area and south Florida are havens for boiler rooms pushing stocks; boiler rooms in California and Canada promote other scams.4

While praising the movie`s realism–Boiler Room`s web site features a glossary of boiler room lingo and writer-director Younger spent a year on research after attending a boiler room recruiting session–Skolnik cautions that the film is drama not documentary. “We need to keep it in perspective.” J.T. Marlin and its manipulative brokers make up “a tiny tiny minority on Wall Street. The vast majority of stock brokers are ethical professionals who, out of enlightened self-interest, work hard for their clients.”
By focusing on the story of the boiler room boys, Skolnik notes, the film necessarily had to devote less time to the victims of securities fraud. “As regulators, we see the terrible human toll-the ruined lives and broken dreams-that these criminals cause.”

To protect themselves, investors should hang up on aggressive cold callers, regulators agree. Baby Boomers with elderly parents, a frequent target to boiler room crooks, should buy them answering machines and urge them to screen their calls, advises Tanya Solov, director of the Illinois Securities Division.

Before doing business with a broker, call the regulators to check them out. The broker`s education, work and disciplinary history, if any, is available from state securities regulators and the National Association of Securities Dealers (NASD). For the telephone number of your state regulator, look in the white pages of your phone book under “Government” or call NASAA at (202) 737-0900 or visit the group`s website ( The NASD has a toll-free hotline to check out brokers 800/289-9999. You can also request a broker’s record online at

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2000 Headlines, Newsroom