City Slickers found guilty of share rigging

James Hipwell, the former Daily Mirror business journalist, was facing a possible jail sentence of up to seven years yesterday, as a jury found him guilty of using the City Slickers share-tipping column to manipulate the stock market six years ago.

Terry Shepherd, a day trader who was in close contact with the Slickers journalists towards the end of 1999, was also found guilty, while Hipwell's fellow columnist, Anil Bhoyrul, pleaded guilty to a lesser charge in August, and did not stand trial.

As well as a possible prison term, the trio could also face bankruptcy. Mr Justice Beatson, who oversaw the case, granted bail to Hipwell and Shepherd yesterday, but warned the pair that he had not yet ruled out the possibility of serving a custodial sentence on them. Sentencing and confiscation hearings will be held next month.

The unanimous verdicts bring to an end a near eight-week trial, and closes a Department of Trade and Industry inquiry which has been running for almost six years.

The Competition Minister, Gerry Sutcliffe, said yesterday: "Today's verdict should send out a clear message that the Government will take action against those who break the law for their own financial gain. The DTI is committed to establishing and maintaining fair markets."

The authorities' interest in the column was roused in February 2000, when Piers Morgan, the then editor of the Mirror, was found to have bought a large number of shares in Viglen, a technology company, the day before they were written about in the Slickers column.

Days later, it was revealed that Bhoyrul and Hipwell had regularly been trading around their own share tips. The Press Complaints Commission and DTI both opened inquiries, with the PCC finding Bhoyrul, Hipwell and Mr Morgan all in breach of their non-statutory code.

The Slickers journalists were immediately sacked, but the Mirror's board rallied behind Mr Morgan. The DTI eventually pressed charges against Bhoyrul and Hipwell, as well as Shepherd, but dropped its case against Mr Morgan.

Over the course of the eight-week trial the jury heard that Hipwell, Shepherd and Bhoyrul had made profits of about £41,000, £17,000 and £15,000 respectively through trading in stocks which were tipped in the column between August 1999 and February 2000.

The journalists would regularly buy stocks the day before they were tipped in the column, selling them shortly after. During November 1999, Hipwell also began to leak details of the Slickers tips onto an investor bulletin board on the internet, using an alias, in the hope of generating a positive movement in the share price ahead of his tip. His username for the website was Twatface.

Although the law does not prevent journalists from trading in the shares they write about, the prosecution showed that Hipwell, Bhoyrul and Shepherd had committed the crime of creating a misleading impression as to the value of the stocks they wrote about.

The court heard that Mr Morgan had encouraged the pair to trade - apparently oblivious of the potential criminality of their practice.

Bhoyrul and Hipwell were recruited to the Mirror by Mr Morgan in 1998, with a view to spicing up the paper's business coverage.

Shortly after losing his job, Hipwell had kidney failure, and came close to losing his life. After months of dialysis, he was eventually saved when his brother donated him a kidney. He has continued in journalism since 2000, most recently editing a gambling magazine, Inside Edge, whose star columnist is Nick Leeson, the man whose trading led to the collapse of Barings bank.

Bhoyrul took the Mirror to an employment tribunal for unfair dismissal, successfully winning £15,000 in compensation. He lives in Dubai and edits a business magazine, but returned to the UK last night to meet his lawyers before sentencing.