'Boiler room' scams: firms shut down

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Two UK-based firms, Chesteroak and Bingen Investments, have been put in compulsory liquidation by the High Court for assisting "boiler room" scams.

City regulator the Financial Services Authority (FSA) had asked for the winding-up order because it said the firms were involved in the scams, which involve members of the public being conned into buying worthless company shares at hugely inflated prices. The FSA has estimated that, on average, victims suffer losses of £20,000.

Some 800 investors are believed to have sent money to Chesteroak and Bingen, the FSA commented.

"Our action against these firms should serve as a warning to other UK companies and individuals who assist boiler rooms that the FSA can and will take action to protect consumers," said Jonathan Phelan, head of retail enforcement at the FSA.

Consumers who may have a claim against Chesteroak or Bingen should contact the Public Interest Unit of the Insolvency Service on 020 7637 1110.

However, Bingen and Chesteroak were not authorised to trade by the FSA so investors don't have recourse to the Financial Services Compensation Scheme.

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