FSA makes arrest in "boiler rooms" probe

Fri 06 Nov, 2009 16:46

LONDON (Reuters) - The financial services watchdog arrested one person and searched three premises on Thursday as part of clampdown on share fraud.

The Financial Services Authority said in a statement on Friday its investigation centred on two individuals suspected of profiting from the activities of suspected overseas "boiler rooms."

Boiler room scams involve fake stockbrokers cold-calling victims and persuading them to buy shares in worthless, non-existent or near bankrupt companies.

The watchdog said it had served injunctions freezing assets up to 350,000 pounds and restraining the unauthorised activities of the businesses and individuals involved.

The FSA has been flexing its muscles recently as it battles financial crime, and on Wednesday secured its second criminal conviction for insider dealing.

(Reporting by Victoria Bryan, editing by Will Waterman)