Phillips & Drew suspends researcher

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The Independent Online
UBS Phillips & Drew, one of the City's largest stockbrokers, yesterday suspended Terry Smith, its pounds 250,000-a-year head of research, for alleged 'gross misconduct'. The suspension took place over Mr Smith's refusal to withdraw from publication a book he has written, criticising the accounting standards of more than 200 British companies.

The book, Accounting for Growth, is based on research written by Mr Smith and a colleague, Richard Hannah, in January last year.

It is due to be published next month by Random Century. The publisher said that 350 copies had already been ordered by P&D and were due to be handed out at next month's international research seminar. However, P&D said it was persuaded by Mr Smith to order 250 copies, an order it would cancel.

Advance chapters of the book, attacking the leisure group Grand Metropolitan, have been published in the Mail on Sunday and Accountancy Age.

Sir Allen Sheppard, chairman of Grand Met, contacted Rudi Mueller, the UK head of P&D's parent, Union Bank of Switzerland, to complain about the pieces, although Grand Met said Sir Allen did not ask for the book to be withdrawn.

Mr Mueller met Mr Smith on Tuesday and asked him to withdraw the book. Mr Smith refused and he was suspended at 4.30 yesterday afternoon.

P&D is now pressing Random Century to withdraw the book, and may take legal action, claiming breach of copyright.

The broker agreed over a year ago to Mr Smith writing the book. He was authorised to make changes from the original circular to update facts, and proofs of two chapters were shown to Bill Seward, P&D's head of global research, last month.

But P&D said that, despite numerous requests, Mr Smith had not shown the firm the final proofs and had not sorted out the question of how royalties should be apportioned.

This is not the first time P&D has crossed swords with an analyst over a research note. Derek Terrington, the group's media analyst, was forced to withdraw a note on Robert Maxwell's Mirror Group Newspapers last summer after complaints by Mr Maxwell. Mr Terrington resigned shortly afterwards to join Kleinwort Benson Securities.

Mr Smith, 39, is a former banking analyst at Greenwell Montagu, Barclays de Zoete Wedd and James Capel with a colourful past. He is best known for writing a sell note on Barclays a week after joining BZW and head-butting a client, James Fulford of the fund manager Allied Dunbar, at a black-tie dinner.

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