Investigators clear Green's associates in M&S shares inquiry

The City watchdog has exonerated Tom Hunter and the Reuben brothers, close associates of Philip Green, over their purchase of shares just weeks before the Bhs owner launched a takeover bid for Marks & Spencer.

The City watchdog has exonerated Tom Hunter and the Reuben brothers, close associates of Philip Green, over their purchase of shares just weeks before the Bhs owner launched a takeover bid for Marks & Spencer.

Mr Hunter and Simon and David Reuben were dragged into the share-dealing scandal at the height of the bid battle as part of the Financial Services Authority's investigation into alleged insider dealing in M&S shares.

Their stakes in the retailer were unearthed during M&S's own inquiry into its share register, in which it sent "section 212" notices to all of Mr Green's business confidants, including Robin Saunders, the former WestLB banker, and Allan Leighton, the chairman of the Post Office.

The FSA has written to Mr Hunter and the Reuben brothers in the past three weeks, clearing them of any wrongdoing. The watchdog, which has pledged to cut its inquiry times by one-third, said its formal investigation was continuing. It handed its inquiry to its enforcement division on 25 June.

A spokesman for Mr Hunter said: "Tom received a letter two or three weeks ago saying he was cleared on the basis of the existing evidence. We were happy to participate in the investigation and are content with the outcome."

Mr Hunter, who founded the Sports Division chain, spent about £1m on buying 375,000 shares in M&S on 16 April via a trust that was set up to benefit his two children. On Friday, the stake was worth £1.3m.

Stuart Rose, the chief executive of M&S who bought 100,000 shares in the retailer days before being told of Mr Green's plans to launch a bid, was cleared of any wrongdoing by the FSA last month. The watchdog has also exonerated Michael Spencer, the chairman of the money broker Icap, who spent £5.5m on M&S shares the day after he had a drink with Mr Rose.

The FSA is understood to be focusing its inquiries on shares trades by institutions in the days before news of Mr Green's intentions broke, rather than dealings by individuals in the months leading up to it.

Mr Green abandoned his attempt to acquire M&S a month ago, after raising his proposed offer three times. As part of the recovery plan unveiled by M&S last month, Mr Rose has pledged to increase the company's share price to more than 400p a share - the value of Mr Green's final proposition.

On Friday, shares in M&S were worth 348.75p. The retailer will outline its plans to return £2.3bn to shareholders via a tender offer on 21 September.