Market makers in London said the stock exchange collected information earlier this year on transactions in Euro-tunnel shares after concern that dealers were driving down the price in advance of the pounds 858m rights issue.
It is believed that the Lon- don Stock Exchange passed its information to the Paris regulator, the Commission des Operations de Bourse, rather than launch its own formal inquiry.
The London exchange said it was not involved in an investigation, but declined to comment on the suggestions it passed evidence to Paris.
Salomon Brothers yesterday became the second investment bank to confirm widespread speculation that it was being investigated by the Paris stock market watchdog. Swiss Bank Corporation admitted on Thursday that it is also involved in the inquiry by the French authorities, though both firms vigorously deny any wrongdoing.
The COB has sent a report to the public prosecutor alleging that there was evidence of short-selling in Eurotunnel shares just before the company announced its rights issue on 26 May last year.
The confirmations by Salomon and Swiss Bank (which owns SBC Warburg) were released after the Indosuez bank and Deutsche Morgan Grenfell denied that they were targets.
Salomon said: "We are aware of the investigation and, of course, we will co-operate with the COB's investigation. Just like SBC, we feel very strongly that nobody here did anything wrong."
French investigators are thought to have examined 70 per cent of the share transactions between 1 January and 25 May last year, said to involve about Fr575m (pounds 74m).Reuse content