Flimflam men and their schemes have long been as plentiful as palm trees in Southern California. Since the trains began rolling in a century ago, con artists and high rollers of all sizes and stripes have been lured by the promise of easy riches and a sunny clime.

Now another swindle has been transplanted here in a big way: penny stock fraud.

"Up until last year, we considered penny stocks to be a Denver and Salt Lake City problem," said G. William McDonald, chief of securities enforcement for the state. "In the last six months, it has really exploded here. It's the fraud of '89."

Top federal prosecutors and securities regulators in Los Angeles echo McDonald's concern. They worry that penny stock abuse is a growth industry in a region already plagued by the nation's largest concentration of the high-pressure sales offices known as boiler rooms.

Indeed, the telephone tactics perfected by fast-talking salesmen who have been peddling bogus investments in precious metals and the like out of Southern California boiler rooms for years have proven very adaptable to penny stock manipulations.

Penny stocks involved in frauds are usually issued by "shell" companies with no real operations. Sales agents claim the companies have great potential, such as a cure for AIDS or a means of making gold out of Costa Rican sand.

The stocks themselves are thinly traded outside the market system, which makes them subject to manipulation by a single brokerage. They are almost always sold over the telephone, most often to unsophisticated buyers who are vulnerable to smooth-talking salesmen.

"We've seen telemarketing techniques being used in connection with (stock) market manipulation cases," said Terree L. Bowers, chief of the major fraud section of the U.S. attorney's office, which is investigating several penny stock cases.

Irving M. Einhorn, regional administrator for the U.S. Securities and Exchange Commission, acknowledged that the swindlers "are faster than we are" and that the SEC does not have enough people to contain the rising abuses.

Two weeks ago, 45 enforcement officials from the federal government, California, Arizona, Nevada, Hawaii and the National Assn. of Securities Dealers, which registers and polices stockbrokers, held an unpublicized meeting here to plot a joint attack.

"We don't have the resources to deal with the multitude of people out there doing it," said Einhorn. "We need a coordinated response. We need criminal cases to send a message."