The Financial Services Authority has yet to recover a penny of the £1m fine it levied against collapsed Leeds firm Fox Hayes for its part in a £15m ‘boiler room’ fraud, the Gazette can reveal.

The City regulator fined Fox Hayes in February for failing to take reasonable steps to prevent the fraud, which deceived 670 UK investors. In boiler room frauds a bogus stockbroker, usually based overseas, cold-calls investors and pressures them into buying worthless shares. Fox Hayes used its status as an FSA-authorised firm to approve promotional material used by the fraudsters.

The FSA declined to comment on the reasons for its failure to recoup the fine, but a spokeswoman said the City watchdog was discussing payment ‘with the relevant parties’.

It is unclear how the FSA will go about recouping the fine. Begbies Traynor, Fox Hayes’ administrators, said the FSA’s fine is a fine not against Fox Hayes LLP but against certain former partners of Fox Hayes, the predecessor practice prior to the incorporation of the LLP.

Fox Hayes’ former partners could not be reached for comment.

In February, the Court of Appeal overturned a decision of the Financial Services and Markets Tribunal, the body that reviews FSA decisions, to reduce Fox Hayes’ fine. The Court of Appeal then increased the fine from £146,000 to £955,000, which was intended to cover £455,000 in commissions paid by the boiler room fraudsters to Robert Manning, the firm’s former senior partner, plus an additional £500,000 penalty.

Lord Justice Longmore said the conduct of Manning and Malcolm Jones, another Fox Hayes partner, was ‘at least reckless and, in my view, deliberate’.

At the time, Margaret Cole, FSA director of enforcement, said she hoped that the Court of Appeal’s ruling would ‘send a strong message of deterrence to other firms and individuals’ that took fees or commission without checking the legitimacy of their clients.