The firm being probed is HBFS Financial Services Limited, a financial advisory firm regulated by the Financial Conduct Authority.
The City of London Police and the Financial Conduct Authority investigations are continuing and the man arrested has not yet been named.
HBFS Financial Services is closed to new business.
In a statement on the HBFS website, the company 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.”
The firm has been regulated since April 2007 either by the FCA or its predecessor the FSA.
The FCA register says the firm, which offers wealth management, IHT planning, ‘international services’ and other financial advice services, is closed to new business.
The FCA ordered the firm to close to all business from new customers “for all activities” from 9 November. The firm was also ordered by the regulator to provide to the FCA with daily bank statements each day by 5pm and to cease advertising
The company was also told to write to all existing customers to confirm that HBFS is prevented from holding client money and all investments (including premiums) should be provided to the product provider.
The company’s website says that in relation to investments: “We make no bones about it – if it’s excitement you’re looking for, you’re in the wrong place. We aim to make decent returns (5%-7%) on low-risk medium and long-term investments. That’s good for your blood pressure, and good for your long-term financial wellbeing.”