Tony Hetherington is Financial Mail on Sunday's ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.

M. R. writes: I am writing about your article on Paragon Time Trading last Sunday. I was contacted by Daniel Knight of Incrementum Funding, who over a few days persuaded me to invest £6,000 in Paragon shares on the promise of an imminent dividend of £135, which did arrive. More calls followed and I parted with a further £9,000. (Yes, I know. How stupid).

I have been invited to invest another £81,000 but have informed Paragon and Incrementum of my intention to cease investing. I have also been in touch with the Financial Conduct Authority and was advised that this had the hallmarks of a scam that I should report to Action Fraud.

Timely: Last week Tony Hetherington exposed illegal share sales in Paragon, a watch hire firm

After last Sunday’s investigation, you now know that Incrementum Funding is a trading name used by a company called IFRC Consultants Ltd, registered to an address in Croydon, South London, though it actually operates from offices in Lower Thames Street in the City.

You are in the same position as the reader whose letter we published last week. You should never have been offered shares in Paragon Time Trading Limited. This was simply illegal.

Paragon says it is raising £1.8million by issuing shares at 60p each. The proceeds are supposed to pay for luxury watches that the company will rent out to customers to wear on special occasions.

Weekday hire costs £220 to £2,500, or up to £5,000 at weekends. Annual membership offering a selection of posh watches is set at £2,500 to £275,100.

The snag is that Incrementum is not licensed by the Financial Conduct Authority to sell shares to anyone. Shares in high risk ventures can be offered to professional or sophisticated investors and to wealthy individuals who can afford to gamble. But you are not in any of these legally exempt categories.

You are a pensioner in your seventies and Incrementum never even asked about your personal circumstances, except to take a sudden interest when you mentioned you were considering equity release to unlock capital from your house.

You were thinking of holidays or a new car. But Incrementum wanted you to borrow against your home and stake more than £80,000 on Paragon shares with no stock market listing and no easy way to turn them back into cash.

It is not even clear whether the £135 you received was a genuine dividend, based on trading profits, or your own cash, trickled back to encourage you to part with more.

Deals like this cannot be enforced. They are unlawful and, under the Financial Services & Markets Act, you are entitled to your money back.

I asked Incrementum boss Timothy Sandhu – also based in Lower Thames Street in the City – what he intended to do about this. Last week he assured me that his company is ‘only marketing towards angel investors, high net worth individuals and sophisticated investors’.

This was not true last week and it is not true today. The only change is that this week Sandhu has offered no comment or explanation.

I also asked Paragon’s owner Richard Ludgate whether he would refund you. I enquired why you were asked to pay your initial £6,000 by personal cheque to him rather than to the company.

Ludgate has allocated himself three million shares at no cost, though I am sure he will see that your cash ends up in costly watches for his company. His response was to tell me: ‘I cannot believe I am receiving further communication from you.’

He added that it would be ‘unfair’ to comment ‘before establishing the facts’.

Well, unless lightning strikes twice, the facts are plain. Incrementum acted unlawfully, just as we reported this time last week. You are legally entitled to your money back. But unless Ludgate coughs up voluntarily, it looks as if you may have to sue to get it.

How much more does it take to rouse sleepy watchdog?

Last Sunday I reported how the Financial Conduct Authority refused to comment on Incrementum’s activities, even though acting as a stockbroker without permission from the watchdog is an offence carrying a maximum two-year prison sentence and an unlimited fine.

However, a few days ago it explained that it assesses complaints and tip-offs ‘to determine whether serious misconduct is taking place’. It also revealed it has received two reports about Incrementum and Paragon. But it still would not say if it was investigating.

In its recent mission statement the watchdog rightly said: ‘Money invariably acts as a magnet for criminal activity. So effective regulation also creates trust that crime in markets will be prevented and acted against if found.’

Yet its last conviction of anyone accused of running an unauthorised investment firm was in 2015 – despite a remarkable 8,612 tip-offs last year alone. The same statement also highlights how consumers are helped by its public register. ‘The FCA register allows all users to search for information on a firm, individual or financial services product.’

Yet the watchdog is considering running down its register, making it impossible to do checks.

Not that the register is perfect. On August 4, the Insolvency Service announced that currency trader George Popescu has been banned from acting as a company director for 12 years. It said he had sold his firm, Boston Prime, without disclosing the sale and that ‘adjustments’ of $3.33million (about £2.5million) to clients’ trading accounts were disputed.

Meanwhile payments totalling $6.2million were made without explanation, much of the cash going to a company connected with Popescu himself.

Yet according to the FCA register, Popescu is still fully authorised as an investment boss without a stain on his character.

If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.