The Takeover Panel is understood to have alerted the Exchange to details of the transactions by Robert Naify, a TCI main board director, and Roxanne Vierra, the wife of Fred Vierra, TCI's executive vice-president.
Both dealt in Flextech shares, making profits for themselves, between October last year when the merger was first announced and the end of December, when full details of the deal were unveiled.
Mr Naify and Todd-Ao Corporation, a company of which he owns 25 per cent, made profits of pounds 90,000 by buying and selling 400,000 Flextech shares between 22 November and 17 December.
Mrs Vierra made a profit of pounds 960 before dealing costs between 24 November and 13 December. Her husband helped conduct the merger negotiations with Flextech and is now on the Flextech board.
The share deals, which were disclosed in the merger document, may prove embarrassing because of the prestigious City team working on the deal. Cazenove and Rothschild advised Flextech, whose chairman is Stanislas Yassukovich, a former Stock Exchange regulator.
Because TCI injected assets into Flextech in return for 60 per cent of the enlarged company, no takeover bid was tabled. However, this type of deal - known in City parlance as 'a whitewash' - has to be approved by the Takeover Panel and triggers restrictions on share trading by connected parties.
Advisers to Flextech admit the transactions should not have taken place but say it was a genuine accident caused by ignorance of UK rules and that the share purchases were reversed as quickly as possible.
Simon Dettmer, a corporate financier at Cazenove, Flextech's broker, said: 'There was no question of any impropriety. It was ignorance of the situation in the UK. There's been no attempt to hide this. I agree it was unfortunate it happened. The company has not been contacted by the Exchange. We have not been contacted by the Exchange. I haven't a clue whether they're looking at it or not. As far as I'm concerned, the panel was happy.'
Mr Vierra said: 'Under SEC (the Securities and Exchange Commission, the Wall Street regulator) rules, Roxanne was free to trade. Unfortunately the rules are different here. As soon as we realised, Roxanne sold the shares.'
The Stock Exchange said: 'We never comment on any specific investigations.'
TCI, which plans to merge with Bell Atlantic to become the sixth largest corporation in the US, hopes to float Telewest, its British cable arm, on the UK stock market later this year.
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