The FSA has turned the tables on boiler room conmen by cold calling the scammers to warn them off using the same tactic to cheat investors.
Boiler rooms use high-pressure selling techniques to persuade UK investors to purchase non-tradable, overpriced or even non-existent shares in companies that are usually based overseas, via unsolicited calls.
In conjunction with City of London Police (CoLP), the FSA are cold calling the fraudsters themselves to tell them they could face criminal prosecution.
The conmen are told "in no uncertain" terms that buying, selling and advising about share investments is a regulated activity requiring FSA authorisation, the FSA says.
They are warned acting without authorisation is punishable by up to two years imprisonment with the possibility of a fine.
Firms called already include Redbridge Associates, Hoffman & Stanley, Wilkins Fairbrother and Marcus Jones International, which feature on the FSA's unauthorised overseas share brokers list.
It is believed these firms are still active and targeting UK consumers.
Boiler room fraud in the UK is valued at £200m per year, according to FSA figures.
Margaret Cole, the FSA's managing director of enforcement and financial crime, says: "This exercise has sent a message directly to the fraudsters that we are intent on disrupting their activities and making life as difficult as possible for them if continue to target UK consumers."
Boiler rooms are not authorised by the FSA and act illegally by selling and promoting the sale of shares in the UK.
In the majority of cases, the FSA says shares being sold are worthless and the boiler room vanishes, leaving the investor out of pocket.
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