Ian Peacock, the joint head of the group's financing division, sold pounds 105,000 worth of Kleinwort shares on 29 April, the day after a board meeting at which the group's chief executive, Jonathan Agnew, declared his intention to resign.
The news was not communicated to the market until the following Tuesday, when the announcement was forced on Kleinwort because the story appeared in the Independent on Sunday following a leak. Kleinwort's shares fell 3p after the announcement.
The Exchange is also looking at whether Kleinwort breached the Exchange's listing rules, which say: 'A company must notify the (Exchange's) Company Announcements Office without delay when the resignation or removal of a director takes effect.'
Mr Peacock, who attended the board meeting at which Mr Agnew resigned, said that he exercised options over 26,530 shares in the company and sold them at 396.5p each.
Mr Peacock said his intention to exercise his options had been communicated to the board, and the sale was approved by Kleinwort's chairman, Lord Rockley.
Peter Churchill-Coleman, Kleinwort's company secretary, confirmed that all due procedures were observed. The shares were sold through the group's stockbroking arm, Kleinwort Benson Securities.
It is understood that Lord Rockley, having taken the advice of the group's compliance department, decided Mr Agnew's decision to resign was not price-sensitive information, as he was not leaving immediately but would remain with the group for another three months. A senior source at the bank confirmed that it had not been Kleinwort's intention to announce Mr Agnew's departure when it did, but that it was forced to make a statement because of the articles in the press.
Since Mr Agnew's departure, Kleinwort has been unable to find a new chief executive, despite the efforts of a firm of headhunters hired by the company to make approaches to a number of leading City figures. Those approached include John Thornton, the head of corporate finance at Goldman Sachs, and Nick Verey, the managing director of Warburg Securities.
A spokeswoman for the Stock Exchange said that 'to a certain extent' it was up to a company and its advisers to decide what they considered to be price-sensitive information. Companies are expected to take a commonsense approach to whether employees should be allowed to deal in shares at any given time, since it is recognised that there is often no clear-cut answer. However, the Exchange has the right to review the decisions by listed firms, and its listings department is looking into the matter.
Ironically, Mr Peacock's decision to sell does not look well timed in hindsight. Kleinwort's shares have performed strongly since April and now stand at 534p - 127.5p higher than the price at which Mr Peacock sold.Reuse content