.jpg)
The Financial Services Authority (FSA), assisted by four police forces, on Wednesday 31 October 2007 arrested two men in connection with an investigation into "Universal Management Services" (UMS) which it believes has been helping illegal overseas boiler rooms.
The arrests are part of the FSA's first criminal investigation into boiler room activities.
On Wednesday, FSA investigators, City of London police and local police forces searched several addresses in North Yorkshire, Hampshire and County Durham and arrested the two men. The search and arrest warrants were obtained by the FSA, using its power to prosecute offences under the Financial Services and Markets Act 2000.
The FSA's investigation into suspected criminal offences by UMS followed complaints of cold calling and high pressure selling from consumers, told by known boiler rooms to make cheques payable to UMS. The FSA discovered that in a 12 month period UMS, together with related organisations GS Asset Management and Continental Administrative Services, sent more than £5 million of investors' money overseas. The FSA has also obtained orders freezing assets of up to £5,450,000 relating to this investigation.
Jonathan Phelan, head of retail enforcement at the FSA, said: "The is the first time we have taken this action and it shows that we will not hesitate to use our powers to protect consumers, including launching criminal investigations where appropriate. However, investors should always be cautious when they are cold called by any firm promoting or offering to sell shares and should first check to ensure that the firm is authorised by the FSA."
If you are a customer of UMS, please contact the FSA's consumer contact centre on 0845 606 1234 with your details. The FSA will keep UMS customers updated as the investigation progresses. UMS was not an authorised firm so investors do not have access to the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS).
No one has been charged at this stage in connection with the FSA's investigation which is ongoing. Criminal investigations are one of many tools that the FSA employs to tackle illegal boiler rooms that target UK investors.
