The Financial Services Authority (FSA) is continuing its clampdown on illegal investment schemes with an assault on the UK’s largest “landbanking” company that it says cheated investors out of £69 million.

The regulator has applied to the High Court for a winding-up petition to close UKLI, a London-based investment operation that the FSA says took money from around 4,500 investors.

Landbanks sell plots of land on the promise that they are poised to secure planning permission for development, allowing the investors to sell their plots to property developers for a substantial profit.

The move is part of an aggressive FSA campaign in which the regulator has closed illegal stockbrokers and other unauthorised investment companies.

UKLI was illegal because it operated as a collective investment scheme, a type of retail investment product that must be registered with the FSA, which UKLI was not.

The FSA said it has also been granted an interim freezing and restraining order against UKLI to protect its remaining assets for creditors, including investors.

As the business was not FSA-registered, investors who lost out cannot claim through the Financial Services Authority Compensation Scheme.

Since the FSA applied to the High Court, Deloitte has been appointed administrator of UKLI. Deloitte plans to contact all investors.

An FSA spokeswoman confirmed that operating an illegal investment scheme would be covered under criminal offences in the UK but declined to comment on whether any criminal investigations or charges had been made in relation to UKLI.

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