FSA urges clampdown on bogus brokers

The Financial Services Authority (FSA) is urging global regulators and law enforcement agencies to clamp down on bogus brokers defrauding 30,000 Britons to the tune £300m a year.

A string of companies have recently warned shareholders about fraudulent behaviour. A fortnight ago Fenner, a £180m engineer, said shareholders had been approached by a third party 'purporting to be acting with Fenner's consent', The Daily Telegraph reports.

FSA is understood to be investigating this type of share fraud which is on the increase, impostors contacting people who are on shareholders' registers and after building a rapport with them, make an offer to buy or sell shares in the company in return for a fee. Once the fee is sent, the alleged broker disappears.

An FSA spokesperson said these fraudsters were 'cloning legitimate firms to use their details', saying the FSA had updated its advice to shareholders who received cold calls, urging them to telephone the number of the registered company, as opposed to the number given out by individuals.

Further reading:

Fraud-as-a-service looms over firms

Read The Daily Telegraph story