SHARES IN Collins Stewart, the stockbroker accused by its former employee James Middleweek of insider dealing and share ramping, traded at abnormally high levels the day after Mr Middleweek releasedhis damaging allegations to the Financial Services Authority.
The development will raise speculation that some corners of the City were familiar with the details of the confidential report by Mr Middleweek which – since it became public – has dragged Collins Stewart’s share price down by nearly a quarter.
Some 4.9 million Collins Stewart shares traded on 16 July, more than three times the average volume in the stock. On the same day Mr Middleweek’s lawyer officially informed Collins Stewart that his report had been delivered to the City watchdog.
The number of shares traded was even higher in the lead up to when the details of Mr Middleweek’s dossier became public in a report in the Mail on Sunday on 24 August. On the Thursday before publication, 6.5 million shares changed hands and on the Friday nearly 2 million were traded.
It has already emerged that Jeremy Benjamin, a friend of Mr Middleweek who manages a hedge fund, sold short about 25,000 shares in Collins Stewart on that Friday.
Mr Middleweek was sacked by Collins Stewart on 9 July after the stockbroker accused him of trying to blackmail the company by offering to ditch his report in return for receiving pounds 2.4m in compensation.
Collins Stewart, which said it was first contacted by the Mail on Sunday on the Friday before it printed details of the sensational row, refused to comment on the unusual share trading volumes.
The company alerted the police to Mr Middleweek’s alleged blackmail attempt, but the Crown Prosecution Service said it would not pursue the case.
Mr Middleweek is believed last week to have made further disclosures to the FSA, including alerting it to the abnormal trading volumes and also to the way Collins Stewart offered to settle the dispute with its former analyst.
