Michael Watts

What the public record shows

Michael Watts, a former registered broker, was sentenced to 60 months in federal prison for participating in a securities-fraud conspiracy. From 2014 to 2016, he and others working with a Melville, New York boiler room artificially inflated the price and trading volume of Hydrocarb Energy Corp. and other stocks through an illegal cold-call campaign. This is a criminal conviction — not an allegation.

The scheme — a classic “boiler room”

According to the U.S. Attorney’s Office for the Eastern District of New York:

• A room full of callers used lies and high-pressure sales tactics to push a thinly traded (“microcap”/penny) stock, driving up its price and volume.
• Insiders then sold their shares into that manufactured demand — the “dump” — leaving the cold-called buyers holding stock that collapsed.
• The campaign targeted elderly investors, a recurring feature of boiler-room fraud.

How to recognize a boiler room

• Unsolicited cold calls pushing a specific small stock with urgency (“buy now, it’s about to move”).
• Guarantees and secret catalysts — “this can’t lose,” “a big announcement is coming.”
• Pressure not to hang up or think it over. Real brokers don’t cold-call strangers to pitch penny stocks.
• Check the caller and firm on FINRA BrokerCheck before saying a word.

Why we rate this 1 / 10 — Avoid

A federal conviction and a five-year sentence for manipulating a stock and preying on elderly victims by phone.

Bottom line

Convicted and sentenced. A cold call pushing a small stock you’ve never heard of, with urgency and guarantees, is a boiler room. Hang up and check BrokerCheck.

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