Hostile buyout/takeover - Wow! my small, near worthless holding is now worth a whopping £42K!

by Juicer
(UK)

Similar to many others, I was contacted by an agent from a brokerag from a company calling itself "Warren Fisher & Associates", out of New York.

They knew my name and the company in which I held stock and told me that there was a company that wanted to complete a takeover and therefore wanted to buy my stock, for a premium of course, to secure the 51% needed to be successful.

This sounded convincing because not a week or two before, I had received official documents from the registrars of my company shares, informing me of a takeover offer and reccommending shareholders accept it (this was official and genuine, reported in the Londong FT).

I was told that this offer would have to remain secret otherwise the stock market would react and the deal would fall through. It was so important, that they wanted to send me an NDA, a non disclosure agreement, to ensure I didn't tell anyone - not even my colleagues at work.
I smelt a rat from the start. There's no such thing as a free lunch, after all.... unless you like Rat, that is.

Still, keen to know more, I agreed to sign the NDA (after carefully reading it) and returned it to their fax number. At that time I also googled the company and it looked like a reputable outfit with lots of business like stuff and photos on it and ... it even talked about the company specialising in Mergers and Aquisitions. Got to be the real deal, right?

So I sent the NDA back to the fax number I was given (and yep, it matched the website) and I was duly contacted the next day to confirm receipt and then be told of the "Good and bad news". The good news was my shares (all 40 of them) had been split and split again but that this information would not be available at my Registrars... oh right, of course not.... (I should point out that I used to work in a Registrars in my early days so knew this to be wrong). Now the bad news was that they were still trying to negotiate on the final share price and it was taking longer than expected. Meanwhile they told me how the deal worked:

The buyer used an 'independent' transfer agent to commit to the purchase. They put a stake - typically 80% up front - as an insurance bond to show their intent to purchase. They needed an equal commitment to sell from the seller (me). Of course, 80% would be a ridiculous amount to expect me to pay. Oh no, I only needed to put up a small percentage - say 20% - which I would get back, with interest, on the day of the final transfer.

Great says I, wanting to see how the scam would work out. I'll await news of the final price.

A couple of days later, I get a call from their Attourney. A nice man who we will call Fred. It wasn't a Fred but it didn't really matter.

Fred went through the details of the transfer again. This Attourney was obviously really worried about the legal aspects because they sure sounded like they were reading from a script.

I was told not to worry because everything would be put in writing. I just need to check over the paperwork they are going to fax over and then return it with my initials in the right hand margin. - It's very important that I initial every page - and on the right. (This level of attention to detail is all part of the distraction).

I was given a price for my stock. It was worth, before all this started, £32 (yeah, I backed a dog to begin with) but now, miracles of miracles, it's worth a full £42K and is mine once I depost a temporary bond of about £4K.
Bargain!

Even now they haven't asked me for the cash yet. This is a long scam. They really want you to feel comfortable and buy fully into the tale before they disappear off into the sunset with your cash.

Beware folks, you're a call away from receiving an offer that is too good to be true.
That's because, short of wining the lottery, it usually is.