Police say the 'boiler room' network operated fake share scams in which at least 850 British people were cheated out of £15 million ($18.25 million) in exchange for non-existent or worthless investments.
Raids on illegal financial dealers in Barcelona, Madrid, Marbella and London led to the arrests, information released recently shows.
Spanish daily El País reported that US police were also involved in the two-year international investigation which resulted in 35 arrest warrants.
City of London Police Commander, and National Economic Crime Co-ordinator, Steve Head, said: "This is a landmark both from an investigative perspective and in terms of our close working partnership with other law enforcement agencies, most notably the Policía Nacional."
“It is our most important investigation ever, targeting people we believe are at the top of an organized crime network that has been facilitating boiler rooms across Europe and which is suspected of being responsible for millions of pounds of investment fraud," he added.
Spain has long been a centre for fraudulent expat operations of this type but the raids are the biggest crackdown on them yet seen.
According to a City of London police statement, Aston Martin, Ferrari, Mercedes and Mustang cars were seized plus designer clothes and £500,000 in cash.
The suspects, one of whom was believed to be paying £50,000 rent on a luxury apartment, are expected to be extradited to the UK to face trial.
Details of the case and arrests were embargoed by a Spanish court until this week.