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Last Updated: Friday, 21 July 2006, 09:58 GMT 10:58 UK
Oil shareholders in scam warning
Phone
Fraudsters cold call their potential victims
Shareholders in UK oil company Northern Petroleum are being targeted by a scam.

The fraud starts when the shareholder receives a cold call and is told that a director of the oil firm wants to sell his shares at a 50% discount.

The potential victim is told the director needs to raise cash after losing money on another venture.

However, the offer is bogus and the oil company has reported the fraud to the police and the Financial Services Authority (FSA).

Consumer warning

Northern Petroleum's shares are listed on the Alternative Investment Market, a stock exchange for small and medium-sized companies.

Oil and mining companies are being selected as people are looking at riskier investments and potentially larger gains
Northern Petroleum boss Derek Musgrove

Derek Musgrove, managing director of Northern Petroleum, told the BBC that the fraudsters had been targeting shareholders in oil companies for some time.

"We are just the first company to make a public issue of this," Mr Musgrove said.

"Oil and mining companies are being selected as people are looking at riskier investments and potentially larger gains."

Mr Musgrove added that he believed the fraudsters were calling from Tokyo, outside the jurisdiction of the FSA.

The FSA has long warned consumers about so called "boiler room" scams - fraudsters cold-calling members of the public offering shares.

Usually the shares on offer are either worthless or do not exist. People who had fallen prey to boiler rooms were unlikely to get their money back, the FSA added.


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