Dubious financial services promoters work the company shareholder registers. I know of one half-commission broker who gained all his clients this way. He would publish a research report on a small quoted penny stock which he gave free to interested names on its share register, and he later hit the lucky recipients with new penny share recommendations. The continental boiler rooms do the same but the stocks they sell are duds.

Legislation is threatening to make misuse of the share registers difficult. The Company Law Reform Bill, pending as this second edition goes to press, will give a company the right to refer a request for its shareholder register to court. If the court is satisfied that the register will not be used for a proper purpose, it will direct that the company need not comply with the request.

The Financial Services Authority (FSA) has said that this legislative development will make it harder for boiler rooms to continue fleecing UK investors, but will not eliminate it. The boiler rooms have sucker lists, made up of those who have already bought dud stocks, which they sell to each other, a spokesman for the regulator notes.