FSA Takes Action Against Boiler Room Operation
The UK's Financial Services Authority (FSA) announced on Friday that it has
obtained interim injunctions from the High Court against UK-based Chesteroak
Ltd, Bingen Investments Ltd, incorporated in Gibraltar, and Samuel Nathan Kahn,
over alleged involvemrnt in assisting overseas boiler room activities in the
UK. The injunctions will stop Chesteroak Ltd, Bingen Investments Ltd and Mr Kahn,
from continuing their involvement in these activities, and will freeze their
assets and other assets under their control. According to the FSA: "Chesteroak Ltd is believed to have either been dealing in investments
as a principal or as an agent for others or was arranging investment deals without
authorisation under the Financial Services & Markets Act 2000. The FSA also
alleges that Bingen Investments Ltd was arranging investment deals and that
Mr Kahn was knowingly involved in these regulated activities, also without authorisation." "Both Chesteroak Ltd and Bingen Investments Ltd appear to have been assisting
a number of suspected boiler rooms based overseas who were approaching UK investors
encouraging them to buy shares in UK companies." Boiler rooms are unauthorised, and act illegally by promoting and selling shares
in the UK. In the majority of cases the shares promoted and sold are not listed
on a recognised stock exchange, so investors will have difficulty selling the
shares. Because Chesteroak Ltd, Bingen Investments Ltd and Mr Kahn are not authorised
by the FSA, investors may not claim compensation from the Financial Services
Compensation Scheme or make a complaint to the Financial Ombudsman Service. The investigation is ongoing. .
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