THE UK finance watchdog is probing the level of pension money that has been invested into south Essex Caribbean investment firm Harlequin Property.

In today’s Echo newspaper we exclusively revealed that a Serious Fraud Office investigation into the firm has been underway for a number of months.

Now the Financial Services Authority, which regulates the UK banking and finance industry, has begun an urgent inquiry to establish the level of people’s self invested personal pensions (SIPPs) in the business.

Harlequin has taken an estimated £300million from investors in deposits for Caribbean luxury accommodation at various resorts, with a large per centage of this said to have come through pension providers.

It has sold more than 6,000 off plan properties, but so far built only around 300.

Harlequin is not regulated by the FSA so there would be no protection to UK investors should the scheme collapse.

The FSA today contacted all pension providers in the country giving them two days to confirm if any of their members have any holdings in Harlequin Property.

Those that do have just five days to provide further information, including details of the amounts held in Harlequin.

An FSA spokesman said: “We are taking steps to establish levels of business with Harlequin".

In January it issued an alert about the firm warning independent financial advisors to carry out due dilligence before recommending it.

Harlequin vehemently denies any wrongdoing. It says there is no reason for the SFO to investigate and has previously cooperated with the FSA, which was satisfied with the information it provided.

Don't miss today's edition of the Echo for an exclusive special report on the involvement of the SFO with Harlequin.