During 2003 and 2004, the law firm Fox Hayes approved a number of financial promotion letters from overseas companies targeted at UK-based private investors. The letters invited investors to apply for free research reports (also approved by Fox Hayes) on a company in which they held shares. By making a request for the free research report, investors agreed to being contacted (usually by telephone) by the overseas company in question about other investment opportunities.
In particular, the overseas companies were selling shares quoted on the Over-the-Counter Bulletin Board in the US (managed by Nasdaq) which were of a type generally regarded as high risk. The total value of shares purchased by investors from the overseas companies as a result of these communications was in excess of $20m (£9.9m). Subsequently, complaints were received from a number of investors about the overseas companies, many complaining of alleged ‘hard sell’ tactics including alleged persistent and abusive telephone calls.
