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Is this the latest big trap for investors? Every day, thousands of people are being cold-called to encourage them to invest in environmentally friendly carbon credit certificates offering "safe" returns of 10% to 15% a year.
But regulators are warning that many of these companies are "knowingly run scams", often conducted by the same people who misled investors through "boiler room" share-selling.
Carbon credits can seem like an attractive opportunity for investors or anyone who wants to offset their carbon footprint, but the Financial Services Authority says people should be wary, and it is concerned that an increasing number of firms are using "dubious, high-pressure sales tactics and targeting vulnerable consumers".
More than 100 companies selling carbon credits have been reported to the City watchdog over the past 12 months, and 22 firms are now named on an official list of unauthorised traders.
A carbon credit is a certificate or permit which represents the right to emit one tonne of carbon dioxide (CO2), and they can be traded for money. There are plenty of reputable firms offering them – but also lots of dodgy ones.
Guardian Money can reveal how one City of London firm that specialised in selling carbon credits to private investors looks set to be liquidated in the high court at the end of this month.
The court will hear from the official receiver that the company, Tullett Brown, should be wound up on public interest grounds following the presentation of a petition by the secretary of state for business, innovation and skills. The firm is in provisional liquidation and its website has been taken down.
It will be unclear how much was invested in Tullett Brown, or how many investors have lost money, until after the court hearing on 29 June. But with many investing £10,000 or more, the total is likely to run to seven figures. It is understood that one investor alone put £50,000 into carbon credits via the firm. But there is little hope of any substantial recovery of funds.
In an official statement about the sector on the FSA website, the regulator says: "The caller may claim carbon credits are 'the new big thing' in commodity trading, industries now have to offset their emissions, the government is focusing on green developments, or that it is an ever-growing market."
This week an elderly Guardian Money reader in Eastbourne, East Sussex, wrote to complain about having received "several pressured telephone calls to invest in one form or another in the certificates". Why, he wondered, has the Guardian not warned readers about these calls?
The answer, in the case of Tullett Brown, is simple. The firm employed firms of lawyers to gag the Guardian and, subsequently, other media. One firm threatened a consumer website with "injunction proceedings" if it failed to remove a Tullett Brown story. A second threatened me (I'm a freelance journalist and former Money staffer) with personal libel proceedings for posting a warning on Twitter.
Tullett Brown initially specialised in landbanking, where investors are persuaded to buy agricultural land at often hugely inflated prices, before moving into carbon credits. Buyers are told they will make large – and often quick – profits.
I had never heard of Tullett Brown – which has no relationship to money broker Tullett Prebon – until July 2011, when David Hogg, who described himself as portfolio manager, phoned me at home out of the blue, though the firm later denied it cold-called investors. He informed me the firm had specialised in "strategic land" (a euphemism for landbanking), but now saw more opportunity in carbon credits.
Hogg promised to send me the firm's carbon credits brochure. The next day, a large envelope arrived, but it contained landbanking literature.
A week later, I received a call from John Stone, who described himself as a senior spot trader at Tullett Brown. He told me the landbanking brochure was sent in error and promised me a new one. He explained how each credit was "sanctioned by a United Nations agency" and that the market was enormous. He could sell me a credit at £6.90 – undercutting, he claimed, JP Morgan, which wanted £7.50. My purchase, for some unexplained reason, would benefit indigenous people, "as a lot of energy would be sold back to the national grid".
The next day, a second envelope arrived. It was another landbanking brochure.
I called the FSA to discuss carbon credits. While it does not regulate this market or the firms involved, it was concerned about the risks to unsuspecting investors. It then posted a consumer warning on its website.
I drafted an article for Guardian Money and phoned Tullett Brown to pose some questions but it failed to respond. The Guardian then emailed a series of questions. The answers were sent via law firm Lennons, based in Chesham, Buckinghamshire, which was acting for Tullett Brown. These did not offer clarity and with deadlines looming, Tullett Brown's name was removed from the articl.
A week later, I posted a story about Tullett Brown on a website. After a day or so, Lennons wrote to both the website and to me at my home address, stating: "Should you fail to remove the article from the website by 10am tomorrow, we are instructed to issue injunction proceedings against you."
The article was duly removed – including all traces in search engine caches. But four days later, Lennons again wrote to me, saying that Tullett Brown had incurred losses and "suspects these losses will not be limited to those already suffered but that further losses are likely to occur". The law firm did not specify these losses.
Lennons continued: "As you can imagine, our client is incredibly angry and frustrated." However, neither anger nor frustration are grounds for a defamation claim. It demanded the "immediate publication" of an "appropriate retraction" and "apology".
I understand that at least one other national newspaper wished to warn readers about the firm, but gave up after a barrage of legal threats.
Aware that investors were at risk, I took to Twitter and an investment website, posting short warnings. The response, in November, came from well-known libel lawyers Carter-Ruck. This stated: "Should you continue to post defamatory material, we anticipate receiving instructions to bring libel proceedings against you personally." I could not afford to take that risk.
But things were about to come crashing down. In mid-March, the government's Insolvency Service marched unannounced into Tullett Brown's office to shut the firm down "in the public interest".
Robert Burns, head of investigations and enforcement at the Insolvency Service, told Money that, while he could not comment on individual cases that were going through the legal process, his staff "turn up without notice at premises".
This usually follows complaints from individuals, trading standards or regulators, though "individuals are the most usual".
He said: "Firms that abuse their company status will be investigated and shut down. Where the public is being scammed, our powers are the most appropriate. We can take a practical approach to attempts to hide behind ambiguous or small print language. The public interest is not legally defined but we act in the public interest."
In this case, the official receiver has been appointed provisional liquidator. The main director of Tullett Brown was Bradley Ferry, whose previous ventures, Tower Road Finance and Talent Division, were dissolved. Three other companies linked to Tullett Brown were also shut: Tamar (London), Johnnystone and Brad Baker.
Guardian Money put a number of questions to the two law firms involved, including asking them what checks they had made before accepting Tullett Brown as a client. Lennons said: "In light of the liquidation of Tullett Brown Limited, we are not in a position to take instructions and are therefore unable to comment on your questions."
Carter-Ruck said: "The partner who dealt with Tullett Brown is no longer at Carter-Ruck. Also, as you are aware, Tullett Brown is now in liquidation. We have no instructions to respond to your questions."
