Financial Mail, London, financial queries column.

Byline: Tony Hetherington

Feb. 13--QUESTION: I read with concern your recent report about the offshore firm Parker Rowe and boiler rooms.

Parker Rowe approached me claiming to be related to a company called City Equities Limited, from which it said it had obtained my details. After high-pressure calls, I invested in a company called Orient Rose 2. I was later persuaded to invest in two more companies, but when I received the paperwork from Griffin Securities (UK) Limited, I noticed the names of some personnel in these companies were the same.

I became suspicious and tried to back out, but Parker Rowe threatened me with legal action and blacklisting, so I paid up.

ANSWER: Parker Rowe is a boiler room -- an offshore firm based in Spain that uses high-pressure phone calls to persuade people to invest in obscure stocks with above-average risks. The Financial Services Authority issued a public warning against it several months ago.

I have no idea how Parker Rowe obtained your details. I can only say that Philippa Kelly, the senior compliance officer at City Equities, which is authorised by the FSA, has given me a cast-iron assurance that her company did not release any such information. "It would be commercial suicide," she told me.

This brings us to Griffin Securities (UK) Limited, which is based in Kent and is also fully authorised by the FSA. Griffin boss Stephen Dean has asked me not to give the impression his firm underwrites a profit for every client, and he does not admit any legal liability.

However, he has told me he wants to avoid "any unpleasant mess" so Griffin will buy back all your shares at the price you paid, which was just over [pounds sterling]30,000.

This is excellent news, but it is not quite the end of the story.

Dean assured me that he had shut down the system under which Parker Rowe did the initial marketing of shares, and Griffin then took over and did all the paperwork, including warning investors of risks. But his decision does not seem to have filtered through to everyone. In a recent message on Motley Fool, the reputable internet investment site, it was claimed that Parker Rowe was still ringing up people, still promoting shares in tiny companies connected to people at Griffin, and still telling people the deal would be finalised by Griffin itself. Moreover, the writer said he had queried this with Griffin and been reassured.

So, I rang Griffin myself, posing as a potential investor. I said I had been contacted by Parker Rowe and wanted to check that this firm was known to Griffin and was genuine. Griffin's Paul Matthews replied: "Yes they are, that is correct." He went on to tell me: "You will actually be buying the shares through Griffin Securities (UK) Limited. That's the company that is FSA regulated. Parker Rowe themselves are not."

So, an FSA-authorised firm is apparently happy to link itself to an unlicensed boiler room, months after the FSA told the public to be wary -- and weeks after its own boss had told me all such links had been cut. And in a further twist to the tale, another boiler room, Carlton Advisory, is also pushing shares connected to Griffin.

Carlton uses a central London phone number and addresses in Bloomsbury and Tottenham Court Road, but is really in Spain.

What it gets from offering to put people in touch with Griffin is a mystery. In a statement from its lawyers, Griffin said: "Our client has no knowledge of Carlton Advisory." And as to the reassurances offered by its own Paul Matthews, Griffin denied the allegation carried on Motley Fool and that it in any way endorsed Parker Rowe. It did not mention my own conversation with Matthews.

The denial added: "Griffin makes it clear in all conversations that Parker Rowe is not FSA-regulated and that it acts solely as a provider of details of potential investors."

Interestingly, this is in the present tense. It appears Parker Rowe can ring who it likes, say what it wants, break any rule, and then Griffin is happy to issue the paperwork, give the statutory warnings, and benefit from the groundwork done by a firm condemned by the FSA.

The watchdog told me: "The FSA would seriously consider taking action if there was evidence to suggest that an authorised firm was involved in a business arrangement with an unauthorised firm."

Well, Financial Mail has that evidence, so now it is up to the watchdog to bite.

Q: I invested [pounds sterling]25 a month in a Maximum Investment Plan with the Royal National Pension Fund for Nurses (RNPFN) for ten years, so my total investment was [pounds sterling]3,000.

I chose the plan because promotional material said "a very high proportion of your premiums is invested each month . . . so that a substantial and very worthwhile lump sum is built up." The aim was to achieve substantial growth, it added.

At no time was I informed that this might be a high-risk investment, so imagine my horror to be informed that my estimated payout would be [pounds sterling]2,820. If I had put each [pounds sterling]25 under my mattress, I would have a bigger sum.

I believe I am a victim of mis-selling and wish to claim compensation.

A: I have had a long correspondence with Liverpool Victoria, which now owns the RNPFN, during which time your investment has actually matured.

I am told its value on the tenth anniversary was [pounds sterling]2,873, thanks to the revival in the stock market. Liverpool Victoria has used the argument that since you responded to a mailshot, the investment risks were your choice.

This is legally true, but frankly I have little sympathy for this washing of hands unless Liverpool Victoria expects everyone to treat all its advertisements and offers with suspicion and scepticism.

The company was on better ground in showing me that the marketing literature did carry the familiar warning that returns could fall as well as rise.

I have tracked the performance of the plan throughout its ten-year life and for much of the time it was in profit, but it lost all of this between 2000 and 2002.

Yes, a better manager would have lost less. But no, I am afraid this does not mean the plan was mis-sold.

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