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The FSA has obtained a bankruptcy order against a man that ran two UK-based companies that helped boiler rooms illegally sell shares to investors.

Samuel Nathan Kahn controlled the affairs of Chesteroak Limited and Bingen Investments Limited.

Mr Kahn admitted liability for claims totalling up to £3.7m made by the FSA on behalf of about 800 UK investors, but disputed the amount in October last year. The regulator added that Mr Kahn then placed himself into an individual voluntary arrangement to try to defeat the FSA's claim. As a result, the FSA applied for Mr Kahn's bankruptcy so a claim for the full amount he owed to investors could be made against his estate.

Chesteroak Limited and Bingen Investments Limited were not authorised by the FSA so investors cannot make a complaint to the Financial Ombudsman Service or claim compensation from the Financial Services Compensation Scheme.

Jonathan Phelan, head of retail enforcement at the FSA said: "We will use every power available to us under the law, including freezing assets and making people bankrupt, against any UK company or person who helps boiler rooms steal money from investors. The bankruptcy order will ensure that Mr Kahn’s affairs are investigated which could mean that investors get some of their money back."

The bankruptcy order follows the liquidations of Chesteroak Limited and Bingen Investments Limited in September 2007 after the FSA alleged that they were dealing in shares or arranging deals in shares without authorisation. In January 2007, the FSA obtained interim injunctions against both companies and Mr Kahn freezing their assets and other assets under their control. Chesteroak Limited and Bingen Investments Limited were also stopped from continuing their involvement in assisting boiler room activities.