Two men have been arrested in connection with a large-scale telemarketing scam, which allegedly swindled millions of pounds from consumers who were sold worthless shares.

The arrests follow a Financial Services Authority (FSA) criminal investigation into Universal Management Services (UMS), after complaints from consumers who were cold called and subjected to high pressure selling from the company.

The operation, led by FSA investigators, included City of London police and local forces searching several addresses in North Yorkshire, Hampshire and County Durham.

The FSA discovered that in a 12-month period UMS, together with related organisations GS Asset Management and Continental Administrative Services, sent more than £5m of investors’ money overseas – funds which have now been frozen.

Jonathan Phelan, head of retail enforcement at the FSA, said: “This is the first time we have taken this action and it shows that we will not hesitate to use our powers to protect consumers.”

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