Tell You the Truth People selling securities must tell you the truth. Brokers who lie to you about any important aspect of an investment opportunity violate federal and state securities laws. Honest brokers use cold calling to find clients for the long term. They ask questions to understand your financial situation and investment goals before recommending that you buy anything. While you may find their cold calls annoying, honest brokers who follow the cold calling rules are acting within their rights.
Dishonest brokers use cold calling to find quick hits.
Some set up boiler rooms where high-pressure salespeople use banks of telephones to call as many potential investors as possible. These strangers will hound you to buy stocks in small, unknown companies that are highly risky, or sometimes, part of a scam. Watch for these signs of trouble. Aggressive cold callers speak from persuasive scripts that include retorts for your every objection. As long as you stay on the phone, they'll keep trying to sell.