One of the most prominent financial commentators at Reuters resigned yesterday after admitting that he had owned and dealt in shares while writing about them for the media company's Reuters Breakingviews operation.
Neil Collins accepted he had breached the company's strict internal rules on writers' share ownership and dealings in a resignation email to Hugo Dixon, the editor of Reuters Breakingviews.
A total of 53 articles had to be republished with disclaimers highlighting the potential conflicts of interest as a result of the affair. The articles in question date back to February last year. Companies that Mr Collins was writing about while he owned shares included BP, Marks & Spencer, the directories business Yell and the drinks group Diageo.
Mr Collins was editor of The Daily Telegraph's City section when it broke the "Mirrorgate" share trading story, which detailed the dealings of the Daily Mirror's then editor, Piers Morgan, in the technology company Viglen before it was tipped in the Mirror's anarchic "City Slickers" column. Mr Morgan was censured by the Press Complaints Commission and one of the column's writers, James Hipwell, was jailed for share ramping, while his colleague Anil Bhoyrul was given a community service order.
There is no suggestion of any deliberate wrongdoing on the part of Mr Collins, nor that he made any financial gains as a result of his breaching Reuters' regulations. It was, in fact, Mr Collins who brought his dealings to the attention of his bosses.
Mr Collins, a prominent and vocal critic of the Financial Services Authority, has made no secret of his interest in share dealing in the past. While at the Telegraph he made clear to its financial journalists that the paper could hardly encourage readers to invest and save for their retirement if it then barred journalists from doing so by owning shares.
However, the affair still comes at a difficult time, with tensions running high between the financial media and the Financial Services Authority. The FSA recently warned all regulated firms that any "first inquiry" from a journalist to members of their staff should be immediately referred to the company's media relations team.
The watchdog said the aim was to clamp down on leaks of price-sensitive information, but senior journalists have accused the FSA of being involved in censorship, and warned that its action could stifle legitimate journalistic inquiry and prevent effective communication between the media and the City.
The FSA has recently begun a crackdown on "market abuse" and taked an aggressive stance against City miscreants seen as breaching rules by using their inside knowledge of deals to reap financial rewards. The crackdown has led to dawn raids on individuals and banks.
Neither the FSA nor Thomson Reuters was prepared to comment on whether the watchdog had been contacted by Reuters about the Collins affair, or whether it would be investigating.
In an email to Mr Dixon, the editor of Reuters Breakingviews, Mr Collins admitted that he had committed a "serious but technical" breach of the rules.
The Reuters investigation into share dealing by its staff is "continuing", according to the editor-in-chief, David Schlesinger. He has urged staff to look carefully at their own market participation to ensure that they comply with its rules.
The columnist: 'I failed to connect my comments ... with the purchases'
Neil Collins to Hugo Dixon
I am sorry that neither you nor David Schlesinger took the opportunity to discuss this affair with me at an early stage, when I disclosed to him that I believed I had broken Reuters' internal rules. I have a basic pension fund, but manage all my other assets, including my family's ISA and SIPP portfolios.
I saw an opportunity in BP, and added to my SIPP holding as the price fell. I failed to connect my comments for Reuters – among millions of words written on BP at the time – with the purchases. I made no attempt to conceal my activities from my colleagues. When during a conversation, Chris Hughes suggested I might be in breach, I immediately (4 October) emailed David Schlesinger.
Following our formal discussion, I discovered I had sold the substantial holding of Marks & Spencer from my late father's estate five days after commenting on the company's results. As with BP, I view this as a serious, but technical breach of the rules. At no stage do I consider that I have abused my position at Reuters.
I am saddened and embarrassed by my breaches of the rules and hope that you will shortly be able to draw a line under this unfortunate episode.
Best wishes, Neil
The editor: 'We take such breaches very seriously'
David Schlesinger, to all staff
Our code on disclosing financial conflicts is set out [in our staff handbook] and forbids journalists from writing about shares they own unless they notify their interest to their manager and from dealing in shares about which they have written recently or intend to write in the near future. Recently an individual breached this code multiple times, writing commentary about companies in which he had a financial interest and making trades shortly after writing. While we have no evidence he was abusing his position for financial gain, we take such breaches seriously and that journalist resigned with immediate effect. We will place a disclaimer in relevant articles in the archive. Questioning of Reuters BreakingViews staff revealed several other cases where disclosures to readers or managers could or should have been made. We will continue to investigate these instances. We will also review our training around the Handbook and its key provisions to minimise the chance of a repeat.
But it is vital that each and every one of you look to your own market participation to be sure you comply with the spirit and the letter of our rules. This is about our contract with our readers; it is about our individual reputations and it is about ensuring that Reuters and Thomson Reuters live up to the standards set both by our long, proud history and our Trust Principles.
These are edited versions of emails from David Schlesinger and Neil Collins