How do I know if approach to buy shares is legit?

christineb333

Hello

I have no experience of shares but have power of attorney for my elderly dad who has a very small amount (about £400 worth of just one company's shares). Hoping someone may be able to help please ...

I was in process of selling them following the way recommended in the shares paperwork, as this is what my mum wanted me to do.

However, last week we got a phone call from a company in the USA saying they were acting on behalf of someone looking to take over this company and if we would sign an NDA and send details of the shares they would make us a good offer. I was very wary that it was a scam but the call came across very legit as does the follow-up email.

Sorry - I feel unable to give more specific details about this in case it is legit and we break the NDA ahead of signing! But equally wary of giving them the details they request in case it's a scam.

Any advice please?

Many thanks.

System

If it sounds too good to be true it usually is. Much better to sell the shares the usual way and be sure of getting your funds than to be caught out trying to earn a little more. Remember there would be no protection at all if you do this.

LHW99

Are the shares ones registered on a UK stock exchange? If so, it seems unlikely that a USA company is legitimate. Also, if something did go wrong (even innocently, such as a misplaced form) its more difficult to chase up, and as said above, no protection.

Paul_DNAP

Let me think, an unsolicited phone call offering a financial deal that sounds amazing? IT IS A SCAM.


Do not given them any personal details, do not let them anywhere near your shares or your bank (yep, they will "wire you the money" direct to your bank account, if you just let them know your account number and security question so the deal goes through easily.)
Just let them know the shares will be on the open market soon, and they can buy them from there if they so wish.
Oh, and if they were really looking to take over the firm by buying up shares, then they would not be telling all and sundry on the phone, what use is a NDA if they have told you all their plans already ahead of that.

nrsql

And you could find yourself and your Aunt liable if it goes wrong.
What's the upside on £400 of shares and who would really be interested in that small amount.

If this was legit it wouldn't be triggered by you trying to sell.

ColdIron

If you have PoA for your Dad you have an obligation to act in his best interests. Putting his money at risk and trying to make a few more pounds by engaging with an unsolicited contact in another country falls way outside of this remit regardless of how 'legit' it might seem to you

christineb333

Thanks for your replies.

Yes, the shares are UK registered so far as I understand. They haven't given details over the phone beyond saying it's a hostile bid. They are purporting to be an intermediary acting on behalf of a client and they didn't give details of the alleged client. They have given their own company details, names, phone numbers etc. This tallies with the number that called. They were already aware of my father's name, phone number and the fact he had these specific shares. This is why I wasn't sure whether it was a scam.

So if it's still the concensus that it's definitely a scam, can anyone please advise where I might report them? Or is it not feasible with them being in the US?

Alexland

The suggestion of an NDA sounds like a classic attempt to isolate the victim from their support network.

A genuine overseas investor would not tell you anything confidential for such a small shareholding. You would probably need to own at least 5% of the company before they would tell you anything of genuine interest.

I would imagine these people will want more than £400 out of you if they can sucker you in.

Just stop communicating and carry on with your original plan of selling them via the correct channels.

Alex.

System

They can get the name and address from the share register. Firms do not go around telling small shareholders about upcoming takeovers!

christineb333

I appreciate the help.

Think if you saw the email and how professional this set-up is you'd understand better why I wavered over its legitimacy and why I'd like to be able to report it if it's feasible.

Thanks again

HappyHarry

christineb333, please could you post the company name of the intermediary?

This may help others who find this thread avoid being scammed.