BUSINESS OPINION: If you are honest with yourself you will probably admit to a feeling of mild superiority every time you read about some fool being taken in by a boiler room scam.

The most recent opportunity to indulge in such schadenfreude was the revelation that a handful of Irish investors were among 150 souls bilked out of more than $2 million (€2.14 million) by a company called Millennium Financial. The Securities and Exchange Commission (SEC) in the US has now moved to close Millennium down, but the investors money appears to be long gone. So how does it happen that someone in Ireland can be so foolish as to give their money to a stranger who rings them out of the blue offering what is to all intents and purposes money for nothing.

This is how. After years soldiering away in middle management, you finally get promoted to the post of general manager with the Irish subsidiary of a US multinational. Shortly afterwards, an unsolicited questionnaire arrives on your desk from a publishing company asking you to fill in some personal details for inclusion in a directory of top executives in your industry. You fill it in and think noting more of it.

Then one day in early 2001, as you are sitting in your office, a call comes through from a confident sounding American representing a company called Millennium Financial. You can mentally picture him sitting at the other end of the phone, all red braces and striped shirt. He starts telling you about a company called Iomega which is listed on the New York Stock Exchange. The company has just appointed a new chief executive and great things are expected of him. If you want, he can buy some shares in Iomega for you.

You say you have to think about it and you do. You already know what Iomega is. In fact you have one of its zip drives at home. Next you get on the internet and sure enough it has just appointed a new CEO. Then you phone the Central Bank. They warn that Millennium is acting illegally by cold-calling you in Ireland, but assure you that it is not illegal to do business with them.

So what do you do? For years, you have been paying your annual bonus into the company stock-option plan and, to be honest, it has not exactly performed. You have dallied with the idea of investing in other stocks, but the reality is that it is not that easy to buy and sell small amounts of shares in Ireland, particularly in hot stocks quoted on overseas exchanges.

You decide to go for it and wire €5,000 to a bank in New York. In return you get a statement saying that Millennium has used the money to buy Iomega stock at $3 a share. And that is pretty much it for seven months. You get regular statements from Millennium and a monthly research book. The statements actually look more credible than similar ones from your Irish stockbroker, but you are still a bit curious that you have not actually got any share certificates. Attempts to establish from Iomega if you are on the share register are inconclusive. But before your suspicions are fully roused, Bill Johnson from Millennium is back on the phone. He tells you that Iomega is at $3.25 and you should really get out now with a modest profit, which, given the meltdown that just occurred in the tech sector, would be something of an achievement.

Bill suggests you now look at the pre-IPO market. This is the buying and selling of shares in companies about to float on the stock market. It is risky but also offers the chance of big profits if the company goes to market. You are steered towards a company called Key Card Communications. Once again you think about it. And once again you go for it.

The fact that the profit on your original investment is a modest $600 actually makes Millennium seem more rather than less credible. You reinvest your original stake with a top up of $9,500 and pretty soon you are glad that you did. Within a month Bill is on the phone again. He tells you that there is a lot of corporate interest in Key Card and that you can get out at $6 a share.

Even better there is another IPO coming down the tracks. A company called Nutek Holdings, and guess what? Bill can get some shares. Of course you go for it.

Things then go quiet for a couple of months. Until two weeks ago when you pick up the The Irish Times and read that the SEC has taken action against a company called Millennium Financial. The SEC says Millennium specialised in scams involving pre-IPO shares in companies called Key Card, kNutek and Sonic Garden, which never had IPOs and in some cases never even planned IPOs. A number of Irish investors are among those defrauded, you learn.

Your heart starts to sink as you read that the US authorities had obtained a temporary restraining order against the company, which is based in the Montevideo free trade zone in Uruguay. "In fact Millennium had no physical presence in any of its listed locations...Millennium paid other businesses to re-route mail, faxes and telephone calls to at least three other countries," The Irish Times quotes the SEC as saying.

According to the SEC, the company pulled its victims in by first offering them shares in genuine quoted companies. "After showing investors an apparent profit or by warning of an imminent loss in the exchange traded companies, Millennium recommended that they purchase the pre-IPO stocks," you read with growing horror..

What do you do? You ring Bill in New York straight away, that is what you do. His office takes a message and he rings you back on his mobile phone within a hour. He is rushing for a plane and can't talk long. You don't mention the story, but say you want to sell all your shares and get your cash back. Bill tells you he will see what he can do and promises he will ring you back in about 10 days, then says good bye.

You feel more than a little foolish.