Last week, Martin Isaacs, a partner with Kanter Jules Grangewoods, a firm of solicitors based in Harley Street, was advising Mr Venables at the Royal Courts of Justice. Three years earlier, however, he had left the dock at Bow Street magistrates court after a psychiatric report indicated he was unfit to stand trial. The charges against him - of creating a false market in shares - were allowed to remain on file.
According to Diane Sharma, for the prosecution, the charges followed publication in the Times on 22 November 1989 of an untrue story that the millionaire Barclay Brothers were about to launch a bid for Williams Holdings. The report sparked frantic trading in Williams shares, sending the share price soaring 59p to 284p. It fell back only after a categorical denial from the Barclays. During the day, more than 3 million shares, worth pounds 8m, had changed hands.
The episode became a cause celebre in the City, with investigators from the Stock Exchange tracking share dealings and calling in the Fraud Squad. Attention focused on one investor who had bought 95,000 Williams shares some weeks previously. On the day of publication of the report, the shares were sold. On the same day, the same investor also dealt in options on Williams shares. Together, those transactions are thought to have netted a profit of pounds 60,000.
Before the Times report, other newspapers, including the Independent, had also been contacted by a mystery informant with a story of a likely bid by the Barclays for Williams. To back up his false claim, the source supplied papers that turned out to be extracts from previously published documents. After making inquiries, the newspapers decided there was no truth in the story.
Mr Isaacs, then a partner at Walsh Lawson Fireman, a firm of solicitors in central London, was arrested in December 1989. Two months later, he left the firm. At Mr Isaacs' subsequent hearing, in April 1990, after the reading of reports from two psychiatrists, Dr Anthony Isaacs and Dr Paul Bowden, the Crown Prosecution Service withdrew from proceeding against him.
Monty Raphael, Mr Isaacs' solicitor at the hearing, tried to get the CPS to drop the charges altogether, claiming 'the future recovery of Mr Isaacs depended on the remote threat of prosecution being lifted'. Mr Raphael added: 'The Sword of Damocles hanging over him will have a deleterious effect on his prospects for full recovery.'
An official at the Crown Prosecution Service confirmed that in such cases the charges remain on file indefinitely. Calls to Mr Isaacs last week were returned by Melvin Pottesman, a fellow partner at Kanter Jules Grangewoods. He said the firm knew all about the case and was 'well aware of those circumstances'. He said 'no charges were proceeded with, there was no Law Society disciplinary action and Mr Isaacs remains a solicitor of the Supreme Court'.
He added that his colleague had 'a serious medical condition at the time, which was treated'. He said it was a thyroid complaint, from which Mr Isaacs had now made a complete recovery.
Mr Venables was unavailable for comment.
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