Separately UK-based Financial.org has told investors it will close their accounts and take 20 percent of their money if they do not raise their minimum investment to $10,000 (£7,158) from $3,000, according to a notice posted on its website and seven investors from China, Malaysia, Singapore, Taiwan, Thailand, the UAE and Vietnam.
Reuters reported in January that Financial.org is managing hundreds of thousands of dollars for Asian investors even though it is not licensed to engage in financial transactions. Investors said their money had been invested in U.S. stocks.
Financial.org, which describes itself as an education business, is not on a publicly available list of firms authorised and regulated by the UK Financial Conduct Authority (FCA) to buy and sell stocks or bonds for clients. Offering investment services without regulatory permission is a criminal offence in Britain.
"The FCA is conducting inquiries into the company's activities," the source told Reuters.
Financial.org, a sponsor of British Formula One team Williams, did not respond to a letter left at its address in London's Canary Wharf district and sent to two Financial.org email addresses. The company's phone number has been removed from its website and the number diverts to an answer phone which did not accept messages.
Williams declined to comment.
The FCA has warned of the dangers of investing through firms it has not authorised, as no independent checks have been made on their businesses. It says it received more than 8,000 reports of potential unauthorised activity in the last financial year.
Last week, Indonesia's regulator, the OJK, placed Financial.org on an investor alert list and warned people away from the company.
"We ask people who have put their money in this entity to take out the money immediately. If there is any civilian who has been harmed, please report to the police," Tongam Lumban Tobing, head of the financial regulator's investment alert task force, told Reuters.
The Malaysian and Singaporean financial regulators last year placed Financial.org on alert lists of unauthorised investment firms with whom investors should exercise caution.
TOP UP OR FACE FEE
Financial.org posted a notice on a password-protected, members-only section of its website in January announcing the increase in the minimum investment, according to the seven investors. Two of them provided screenshots of the notice.
The notice gave investors until March 31 to top up their accounts, after which it said accounts that did not meet the new threshold would be closed and investments returned in a lump sum "with a 20 percent account closure fee levied".
Laith Khalaf, senior analyst at financial services company Hargreaves Lansdown, said it was highly unusual for regulated investment firms to require investors to top up their investments or to charge withdrawal fees.
Five of the seven investors said they were not concerned about the change.
"It does not affect investors much, because if they do not upgrade, they can get their money back ... minus 20 percent," Albert Anthony, a fashion business manager from Vietnam, told Reuters via Facebook Messenger. He has invested $100,000, according to a screenshot of his account he sent to Reuters.
However, one investor said attempts to withdraw money had failed. The person, who declined to be named due to concern about their investments, provided screenshots of an account page showing withdrawal requests had been rejected. - Reuters