FSA gets £270,000 back for 'share scam' victims

Thirty-two victims of an alleged share scam will recoup a total of £270,000, the Financial Services Authority announced today.

The City watchdog said the money should cover the full amount the victims invested in worthless shares - an average of more than £8,400 each.

The FSA took action against two people and seven businesses last November who were suspected of profiting from an overseas boiler room, so-called because of their high pressure sales techniques. One suspect was arrested, although the investigation is ongoing.

The regulator said the victims were cold-called from abroad by people saying they worked for brokers Rothman Capital, Bishop Capital, Bernam Shore, and Investor Relations Corp.

They were encouraged to buy shares in a company called Eduvest, with the promise of a significant return on their investment, according to the FSA. They had to pay cash into a British bank account to buy the shares, only to find the stock was worthless, it said.

Margaret Cole, the FSA's director of enforcement and financial crime, said: "We are extremely pleased to be able to recover and return money to investors who have been persuaded to hand over their money as part of a share fraud scam."