The High Court has shut down a UK firm which acted as a front for bogus overseas investment companies.
So-called boiler room firms target victims by phone
The Inertia Partnership was wound up after the Financial Services Authority (FSA) petitioned judges to have the East Sussex-based firm closed.
Inertia took more than £1m from people who had been sold shares by firms known as "boiler rooms", the FSA said.
The outfits are unauthorised and use cold-calling tactics to sell shares.
High Court Judge Jonathan Crow QC said Inertia had played a significant role in the operations of the so-called boiler rooms.
He said Inertia's participation as a UK-based firm was calculated to reassure potential investors.
The FSA said people had been called by known boiler room outfits including Integra Advisory Group, AIM Management and Standford Long, who misled investors.
It said Inertia acted as an agent for the firms, making arrangements for shares to be purchased in a number of UK firms.
Investors were charged commissions of up to 200% of the actual price received by the share issuing company, the High Court said.
"Investors were encouraged to take comfort in the fact that Inertia was based in the UK so their investment was supposedly safe," said Jonathan Phelan, the FSA's head of retail enforcement.
"In fact it was transferring substantial sums of investors' money to an unauthorised overseas organisation."
Mr Phelan added: "Because Inertia was not authorised, investors do not have protection for the money they have paid over, such as access to the Financial Services Compensation Scheme or the Financial Ombudsman Service."