City reeling as disputed US research strikes again
Second victim plunges after damning claims are issued by US 'researchers'
A second major UK company in little over two months yesterday suffered a massive share-price rout following serious allegations about its operations from US "researchers" who themselves, or their backers, may have benefited financially from a fall in its value.
The assault on insurance claims and technology company Quindell's reputation sent its shares crashing as much as 53 per cent in what was seen as an echo of the controversial attack on fellow UK tech giant Blinkx earlier this year.
Around £900m was wiped off Quindell's value after a US company called Gotham City Research, which admits on its website that it may take bets against the shares it writes about, issued a note with a host of damning claims about the company's finances.
Quindell furiously denied the allegations and said in a stock-exchange statement that it "considers the note to be highly defamatory, deliberately misrepresentative and entirely rejects the conclusions that are made".
The company said it would put out a detailed response later this week and was "reporting co-ordinated shorting activity to the appropriate authorities", as well as consulting legal advisors. "Shorting" is City-speak for betting a share price will fall.
Quindell sent out legal letters last night to media outlets requesting the allegations not be repeated and put Gotham on notice that it would sue.
The share price collapse personally cost the company's chief executive Rob Terry nearly £100m on paper.
Blinkx's shares, like Quindell's, also halved in value after a US research note was published about its operations earlier this year. It too strongly denied the allegations.
That note's author, Harvard professor Benjamin Edelman, had accused Blinkx of "sneaking on to users' computers and defrauding advertisers" in a blog post. He later withdrew one of his allegations and admitted his research had been funded by two anonymous US investors, fuelling speculation that they were "short sellers".
Due to the fact that the notes both emanated from the US, City of London watchdogs appear powerless to prevent such sniping from across the Atlantic destabilising UK companies.
Quindell will now report Gotham to US Securities and Exchange Commission instead. Its management was said to be furious such allegations could be made with apparent impunity andwill stress to investors that its accounts have been fully audited by KPMG and that it has booked £1bn of new contracts.
Quindell handles outsourced insurance claims, primarily for car insurers, and also makes black boxes for vehicles to help insurers monitor how customers drive. It has completed a host of deals lately, buying car insurer Ingenie, whose shareholders include the former England footballer Gary Lineker.
- 1 Liam Gallagher brands Kanye West 'utter s**t' during BRIT Awards performance
- 2 Isis burns thousands of books and rare manuscripts from Mosul's libraries
- 3 People who sleep more than eight hours are more likely to have a stroke, research shows
- 4 Kanye West climbs on table at Nando's to crowd chants of 'Yeezus' before Brit Awards 2015 performance of 'All Day'
- 5 Muslim women's rights campaigner writes heartfelt letter to girls thinking of joining Isis
Ukraine crisis: Putin will cut gas to Europe unless Russia is paid by the end of the week
Liam Gallagher brands Kanye West 'utter s**t' during BRIT Awards performance
Isis burns thousands of books and rare manuscripts from Mosul's libraries
Missing Mexico teachers: Protests organised by union quashed in violent police crackdown
Mohammed Emwazi: Nine things we now know about man named as Isis militant 'Jihadi John'
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
Ukraine crisis: 'One miscalculation, and Britain faces an existential threat to our whole being...'
iJobs Money & Business
£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...
£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...