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Although the New York Attorney General's Office has dramatically increased the number of investigations and enforcement actions over the past two years, there remains much more to do in this area, some of which can be greatly assisted by the legislative proposals and recommendations set forth in this report.
This report represents the current state of micro-cap stock fraud as practiced in New York. As the hearings showed, however, the problem is of national concern. While much of the cold-calling originates from New York (one office on Long Island made approximately one million telephone calls per month(2)), investors that are being defrauded live throughout the entire country. As Bradley K. Skolnik, the Securities Commissioner for the State of Indiana, stated in his testimony:
Investors in America's heartland, including Indiana, are often the prime targets for these corrupt telemarketers who purport to possess inside information regarding the market for small-cap and penny stocks. In reality, however, these brokerage firms are nothing more than slick boiler-rooms intent on robbing innocent investors of their hard-earned savings.(3)
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