The number of 'dawn raids' conducted by the UK's Financial Conduct Authority has almost doubled over a 12-month period, rising from 13 in 2017 to 25 in 2018, according to fscom, the financial services regulatory consultancy.

fscom says that one of the causes of this is likely to be an FCA crackdown on unregulated investments. Some investment providers have been accused of misleading retail investors into believing that their products are regulated - a phenomenon that affects HNW investors as well as other.

fscom says that the FCA probably decided to be very active in clamping down on unregulated investments when London Capital & Finance collapsed. LCF offered retail investors an 8% annual return on its ‘minibonds.’ The firm entered insolvency in December, having raised a reported £214 million from approximately 14,000 individual investors.

FCA raids are searches of businesses' and individuals’ premises in the presence of policemen and with the authorisation of warrants. The regulators often conduct them in the early hours of the morning, the better to capture as much evidence as possible. Sometimes, the policeman in question makes an arrest.

Other unregulated investments that have been targeted for raids by the FCA include ‘boiler room’ scams and unregulated and highly risky investments in binary options, overseas property and wine.

fscom adds that the 25 raids undertaken by the FCA in 2018 is the highest annual total since 2010, when the fallout from the credit crunch was still occurring.

The number of raids fell to single digits between 2014 and 2016 as investigations of misconduct such as the rigging of the London Interbank Offered Rate and forex rates came to a conclusion.

Jamie Cooke, the managing director at fscom, told Compliance Matters: “Enforcement activity against potentially criminal behaviour in financial services seems to be on an upswing. Investment frauds and the more extreme forms of mis-selling are often discovered when the broader economy and the property markets slow – something that we have seen over the last year.”