The Financial Conduct Authority (FCA) has opened an investigation into boutique financial planners HBFS Financial Services.
The City of London police have arrested a 49-year-old male from Borehamwood in connection with the probe.
The regulator has also restricted Hertfordshire-based HBFS Financial Services, closing it to new money and preventing it from advertising its services.
A statement on the company's website said: 'Please note that HBFS is not accepting business from new customers at this time. Our full "ongoing" service to existing clients and their investment needs continues as normal.'
In a statement, the regulator advised HBFS’s customers to check the status of any investment made through HBFS and if they have concerns to contact City of London Police email: email@example.com.
'The City of London Police and the Financial Conduct Authority are working closely on an investigation concerning the affairs of HBFS Financial Services Limited, a firm regulated by the Financial Conduct Authority,' the FCA confirmed.
A spokesperson for HBFS told Wealth Manager: 'We are fully co-operating with the FCA and City of London Police investigation.
'This investigation involves one investment account at HBFS and we hope for a speedy resolution.'