The Serious Fraud Office (SFO) has given up trying to prosecute anyone over the collapse of Keydata, as it has insufficient evidence to continue with the case, it has said.
It began investigating Keydata in July 2009, a month after the firm was put into administration, following a referral by the FSA.
But almost two years later, in what has emerged to be one of the biggest financial services scandals in a decade, it has said it will no longer pursue the case.
In a statement on its website it said: "In the last quarter of 2010 we reviewed all of the information and intelligence we had on our Keydata case and cases related to it.
"After extensive consideration we concluded that we had insufficient evidence to secure a prosecution in this case"
The SFO said it will instead focus its efforts solely on tracing the assets of SLS Capital SA, rather than attempting to prosecute.
It is looking into how £103m disappeared in a fraud at Luxembourg-based SLS, after 5,500 of its policies were sold to UK customers.
The SFO said it hope to provide a further progress update on this in July.
Advisers paid out £93m in February in an interim levy primarily to cover the cost of compensating investors after Keydata's collapse in 2009, owing to the firm's inability to pay its tax liability and other failings.
In total, firms in the FSCS's investment intermediation sub-class were billed a record £326m as a result of Keydata.
Has been cold-calling consumers
New shares admitted to London Stock Exchange
Slow and steady growth
Missed funding target by £240,000
Denies any wrongdoing