The concept of a chop or bucket shop is nothing really new, nor were they restricted to the US. Jessie Livermore makes reference to them at the early part of the 20th century and when I first started in broking there were still some futures and OTC option bucket shops still operating. I dont know how broking operated nowadays but back in the last century cold calling was still a feature of the industry. In some ways it was less sophisticated than the US in that they didn’t have tested scripts to follow but in some ways it was more sophisticated since brokers used to be able to get hold of lists of shareholders in a given company from share registries, so there was a natural jumping off point for any conversation.
Within the finance world clients will always come off second best when remuneration is dependant upon not how well the client does but how much they turn over.
When Paul Taboada ran Charles Morgan Securities Inc. at 120 Wall St., he set himself apart by wearing suits with the brokerage’s name stitched into the pinstripes.
He ran into trouble within a few years. A client was sent to jail in 2010 for a fraud prosecutors alleged Taboada facilitated. Customers complained about a fund he set up to invest in Facebook Inc. (FB) before it went public. That didn’t slow him down. He shut the firm amid an investigation by regulators and moved to Blackwall Capital Markets Inc. at 100 Wall St., where trainees call hundreds of strangers a day to pitch stocks.
More at Bloomberg
