Small Talk: Winterflood and Pershing settle their differences

Top small cap market-making firm Winterflood Securities has agreed to a multi-million-pound out-of-court settlement with Pershing Securities, Small Talk can reveal. The dispute between the two City firms was part of the scandal surrounding the collapsed stockbroker SP Bell and its chief executive, Simon Eagle.

The case had been expected to come to trial this month but was abandoned by Pershing after Winterflood, owned by the merchant bank Close Brothers, agreed to pay for a settlement. SP Bell fell into administration in 2004 after it emerged that dozens of its customers' accounts had been used to buy about £10m worth of shares in the AIM computer company Fundamental-e. As well as heading up the stockbroker, Mr Eagle was also chairman of Fundamental-e.

Pershing helped settled the share buying by SP Bell but was left out of pocket when it became clear that the trades were unauthorised and customers refused to pay for the stock acquired in their names. Winterflood is believed to have helped SP Bell execute the trades and was held responsible by Pershing for failing to check they had been correctly authorised.

However, both sides now insist the matter is closed. A statement from Winterflood Securities said: "The parties, Pershing Securities Limited and Winterflood Securities Limited, confirm that all claims have been settled and withdrawn and that both sides are now looking forward to developing their business relationship".

Sound Oil

The cash shell Sound Oil is set to return to AIM this week, possibly as soon as today, having completed a deal in Indonesia and a £13m fund raising. Sound shares were suspended at 7p in March when it revealed it was looking at an acquisition in Asia that would entail a reverse takeover.

Meanwhile, in May the group bought a 50 per cent interests in a Bangladeshi gas block for $2m, next to Cairn Energy's Sangu field, in the Chittagong Hills.

The wider market shake-out has taken the wind out of the small cap oil stocks in recent months, but those behind Sound will still be hoping the news sends its shares sharply higher.

SectorGuard

Security company SectorGuard has grown profits in every year since its March 2002 float. This year should be no different. Interim results, to be posted by SectorGuard today, will show a 32 per cent rise in operating profits to £690,000 and a 16 per cent increase in sales to £9m for the six months to 31 March.

The group started out as a manned guards firm but has since branched out via acquisitions into other security areas including the protection of assets belonging to retailers and homes with intruder and fire alarms.

The business began life in 1998 with 50 employees. Today it has more than 700. Recent months have seen SectorGuard buy an intruder alarm business. Expect more acquisitions in the coming months.

Over-reaction to Adamind's warning

Adamind, the Israeli multimedia messaging group spun out of Emblaze Systems in 2005, saw its shares halve last week after a profit warning. Understandably, the City took news of contract delays badly. The company supplies software that ensures multimedia messages and e-mails are compatible between different handsets and securing a steady stream of deals is vital for its target of being profitable next year.

However, reaction may have been overdone. Adamind shares closed at 39p on Friday. Given the company has $20m of cash on its balance - around 33p a share - this values its ongoing business at virtually nothing. Yet Bridgewell Securities, the group's broker, estimates Adamind can generate sales of $17m next year and a pre-tax profit of $1.5m.

Adamind is looking to cash in on the ever rising number of mobile phone users who are moving from text to picture messaging and downloading content such as news and music clips. This growth is unlikely to let up any time soon and Adamind has more than 100 networks as clients, including US giant Verizon Wireless. Now is not the time for shareholders to abandon Adamind.