The FSA has launched High Court proceedings against land banking operations accused of scamming investors out of £45m.
The FSA has launched action against six firms it suspects of selling land to investors that would never be given planning permission or stand any chance of being developed, according to the Telegraph.
Examples of land being marketed includes a plot in a site of special scientific interest, one with no access and another on a near 45-degree slope.
Three cases are currently going through the High Court, according to the newspaper.
They include action against James Kenneth Maynard and Countrywide Holdings; action against Stephen Watkins, trading under the name Consolidated Land; and action against Charles Newcombe and Elite Land Developments.
The companies did not return the paper's calls.
The largest of the six cases the FSA is currently prosecuting is thought to be worth around £35m.
It is not known whether this case is one of the three uncovered by the Telegraph.
Jonathan Phelan, head of retail enforcement at the FSA, declined to comment on individual cases, but he said illegal land banking operations were something the regulator was keen to stamp out.
"Certain land banks are becoming more and more criminal in the way that they operate.
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Denies any wrongdoing