If you are contacted by a telephone salesperson, you should ask whether the investment offered is registered for sale in Wisconsin. Legitimate broker-dealers and agents will gladly provide this information to you. If you are in any way uncertain, you should double-check their answers by contacting the Department. The term boiler room describes the heat and high pressure generated by the callers as they try to convince investors to send in their money. In most cases, either the company or product does not really exist, or it does not operate as represented.
Early investors receive what appear to be high dividends or interest on their investments.
Reports of these high returns are then used to entice new investors. In reality, there is no underlying business. The early investors are simply being paid off with funds received from the later investors. When the scheme collapses, as it always does, current investors lose their money and the promoters walk away rich. This is simply a ploy to get you to drop your defenses so that you can be separated from your money.