Banned financial adviser Gary Hexley, whose collapsed firm left more than 200 creditors out of pocket to the tune of more than £2 million has been arrested on suspicion of duping his clients.
Hexley and another individual have been held and interviewed by officers from the Financial Services Authority.
Hexley's Sutton Coldfield-based firm Greenfield International collapsed last year leaving a total of 237 creditors, including many elderly investors, with total debts of £2,077,426.05.
The 49-year-old financier was made bankrupt with liabilities of nearly £1 million and banned and censured by the FSA following the firm’s demise.
Now the FSA has issued a statement which said: “The Financial Services Authority took action against two individuals suspected of providing financial advice when not authorised to do so and making misleading statements to investors.
“With the assistance of the West Midlands Police, the FSA executed search warrants on three premises in the West Midlands and two individuals were arrested.
“Nobody has been charged at this stage in connection with the FSA’s investigation which is ongoing.”
West Midlands Police officers executed the arrests because the FSA does not have the power to detain people.
A West Midlands Police spokesman said: “We accompanied the Financial Services Authority to execute two warrants as part of their investigations.”
One person who almost invested in Hexley's scheme was 85-year-old cancer sufferer Stan Hadgkiss, from Sparkhill, had been visited by Hexley at his home, and persuaded into investing savings into a trust fund in the event of his being taken into care.
His family later stepped in to warn Mr Hadgkiss that he could lose his money – and he visited his bank to stop the cheque.
In September Hexley pulled out of a meeting with creditors seeking compensation following the collapse of Greenfield International, blaming “excessive stress”.
The Financial Services Compensation Scheme has confirmed it is looking into whether Greenfield International investors are eligible for compensation.
Tamworth MP Christopher Pincher has called for speedy compensation for victims.
Hexley was unavailable to comment on the arrest.