A UK lawyer has been severely punished by the Financial Services Authority (FSA) for helping bogus Spanish share-selling firms, known as boiler rooms.
Andrew Greystoke and his firm Atlantic Law have been fined £400,000 and he has been banned for life from the financial services industry.
He authorised 50 letters for the boiler rooms between December 2005 and March 2007.
The FSA said their activities led to at least 130 people in the UK losing at least £3m.
However, the regulator believes that as they were just the victims who complained, there were probably many more people who would have lost much more money in total.
"Atlantic Law and Andrew Greystoke acted recklessly, without integrity and with a complete disregard of the risks to consumers," said Margaret Cole, FSA director of enforcement and financial crime.
"He did so without taking reasonable steps to ensure that the advertisements were clear, fair and not misleading and despite having reason to doubt that the Spanish firms would deal with UK consumers in an honest and reliable way," the FSA said.
'Threats and blackmail'
Instead of being sent free investment research as promised, the promotional letters were used to garner the telephone numbers of potential victims who could then be persuaded to buy dud shares.
"The Spanish companies subjected UK consumers who requested the reports, which Greystoke knew to be of poor quality, to pressurised selling of high-risk illiquid shares in unlisted small companies," the FSA explained.
"UK consumers who complained to the Spanish companies were subjected to threats and blackmail," it added.
The FSA estimates that share frauds such as this cost UK investors about £200m a year.
Last year it found 734 victims who lost an average £24,000 each.
"Greystoke accepted before the tribunal that these Spanish firms were boiler room share scam operators," the FSA said.
"Greystoke approved their advertisements despite seeing consumer complaints and press articles clearly warning of their activities and despite negative previous experience of acting for other Spanish boiler room clients," the regulator added.