Rare "boiler room" win for defrauded investors

By Jennifer Hill

LONDON (Reuters) - More than 150 investors have clawed back one million pounds from a "boiler room" scam in a rare victory for swindled consumers.

Boiler room firms promote and sell shares to British investors that are overpriced, restricted for onward sale and have little or no realisable value.

The usual approach is a high-pressure pitch over the phone -- the most probable reason for the name.

The Financial Services Authority (FSA) is unable to take direct action to shut down such firms because they are largely based outside the UK.

But in this case, 153 investors have been refunded about 90 percent of a total 1.25 million pounds after they were illegally sold shares by two unauthorised, overseas investment firms.

The FSA worked with Canadian regulators -- the British Columbia Securities Commission and Ontario Securities Commission (OSC) -- to freeze the funds.

Investors had sent the money to North American based-companies Rocky Mountain Gold Mining Corp and Rocky Mountain Gold Mining Inc.

Jonathan Phelan, head of the FSA's enforcement division, said: "This is a rare bit of good news for investors who have been persuaded to hand over money to boiler rooms, as usually the money disappears without a trace.