The senior partner at London firm Atlantic Law has been banned by the City watchdog from working in financial services and along with his firm, fined £400,000 in total for ‘recklessly’ signing off adverts issued by Spanish fraudsters.

The Financial Services and Markets Tribunal has upheld a Financial Services Authority (FSA) decision that Andrew Greystoke ‘recklessly signed off Atlantic Law’s approval of 50 UK investment advertisements’ issued by four unregulated Spanish stockbroking firms ‘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 (pictured) said that Greystoke accepted these Spanish firms were boiler room share scam operators, and approved their advertisements despite seeing consumer complaints and press articles warning of their activities, and having negative previous experience of acting for other Spanish boiler room clients.

The advertisements, approved by Greystoke, offered free research reports on respectable listed companies but were misleading because their true purpose was not to offer the free reports, but to sell shares the value of which he knew to be at least doubtful.

The FSA said that the Spanish fraudsters subjected 130 UK consumers to pressurised selling of high-risk illiquid shares in unlisted small companies, and that any UK consumers who complained to the Spanish companies were threatened and blackmailed. The 130 investors told the FSA they had invested a total of more than £3m, which they are likely to lose.

Atlantic Law and Greystoke were fined £200,000 each. Greystoke could not be reached for a comment.

FSA director of enforcement and financial crime Margaret Cole said: ‘Atlantic Law and Andrew Greystoke acted recklessly, without integrity and with a complete disregard of the risks to consumers. The tribunal’s decision supports our view that firms and individuals that assist boiler room operators should be brought to task. This has been a hard-fought case into which the FSA has put significant time and resources. It will send a strong message of deterrence to other firms and individuals that may be tempted to turn a blind eye to the legitimacy of their clients in exchange for fees or commission.’

The tribunal hearing took place between 1 and 10 March.

The FSA estimates that share fraud costs the UK £200m a year. It said that 734 people lost an average of £24,000 each from boiler room scams last year, putting total losses to boiler rooms at £17m annually.