Piers Morgan, the former editor of The Daily Mirror, was well aware his two "City Slickers" business journalists were trading in the shares they tipped, and encouraged them to do so, a court heard yesterday.
Taking the stand for the first time since the trial began, James Hipwell, the former Mirror business columnist who is accused of market abuse, said Mr Morgan had told him it made sense for him to trade in the stocks he tipped, using the analogy that "you would not learn to drive from somebody who had never been in a car - you would not learn from a manual".
Philip Hackett QC, for Mr Hipwell, asked him whether Mr Morgan was aware he was buying shares "at and around the time of the tips". Mr Hipwell replied: "Yes. I made no secret about it. I was encouraged to do so by him. He said if we were in the business of tipping shares, he was happy for us to trade."
Although not illegal, the Press Complaints Commission's (PCC) code of conduct stipulates journalists should not trade in shares they write about. Earlier in the trial, Trinity Mirror's group legal director, Paul Vickers, told the court it was his responsibility to ensure copies of the code were posted around the workplace and that staff were aware of it.
However, Mr Hipwell told the court yesterday he had never seen the code and was unaware of any internal rules banning or discouraging him from trading in the shares he wrote about. "To the best of my knowledge, no one at the Mirror had a copy [of the PCC code] or had ever seen a copy," he said.
Mr Vickers acknowledged the lack of any concrete rules around share trading in an e-mail to senior staff at the Mirror on 3 February 2000, when news of the activities had first been written about in another newspaper. "The group is in the place of finalising guidelines which will be put in place next week," the e-mail read.
Mr Hipwell told the court Martin Cruddace, the Mirror's lawyer, was also aware of his trading activities and had "participated in some of those trades himself". Earlier in the trial, Mr Cruddace said he had no knowledge that the shares he was buying were about to be tipped. But when questioned whether this was the case, Mr Hipwell said: "That's not my recollection. Especially in one [case] - Atlantic Caspian. I indicated the share would be tipped in the paper and he bought the shares before [the tip] ... and was happy to do so."
Mr Hipwell is accused of conspiring to create a misleading impression as to the value of investments, through the use of the City Slickers column towards the end of 1999 and the first few weeks of 2000. A day trader, Terry Shepherd, is standing trial on the same charge.
Questioned by Mr Hackett on the accuracy of his column, Mr Hipwell said he was proud of his work. "I think it was accurate. We had an outstanding record as tipsters and I stand by the tips," he said. "No one has a 100 per cent record, but I think we had a very good record compared with other newspapers."
Mr Hipwell confirmed the Mirror had been named as having the second most accurate share-tipping column in a survey in The Sunday Times in 2000. He said the only paper to beat the Mirror was The Sunday Times.
"We formed an impression early on in 1999 that there was going to be an explosion in the [technology] sector ... and we were proved right," Mr Hipwell said. The case continues.Reuse content