Stockbroking firm Collins Stewart has failed in its attempt to hold
the Financial Times liable for a significant drop in its share
price after the newspaper's coverage of a former employee's
allegations of insider dealing.
Stockbroking firm Collins Stewart has failed in its attempt to hold
the Financial Times liable for a significant drop in its market
capitalisation after the newspaper's coverage of a former
employee's allegations of insider dealing.
The article is still the subject of a separate libel claim for
damages of £37 million for lost business and profits; but the High
Court yesterday said that the London firm's £230.5 million claim
for the share price drop was "untriable and a waste of the
resources of the court."
"The suggested measure of damages is far too uncertain to be
acceptable as a legal basis for assessing damages," said Mr Justice
Tugendhat.
The case centres on the FT's reporting of allegations made by
James Middleweek, a former Collins Stewart analyst. Middleweek
produced a document last year which claimed that the firm was
guilty of insider dealing and share price manipulation. The
Financial Services Authority investigated but announced the closure
of its investigation in August this year.
The FT has argued that it did not pass judgment on the
allegations but merely reported them. While the remainder of the
case is due back in court in April 2005, FT editor Andrew Gowers
observed of yesterday's dismissal, "It would be a dark day for
journalism and for a free press if publishers were to be held
liable for a drop in the share price following publication of an
article reporting on company events."
