LSE mulls legal action against traders over Furse rumours

The London Stock Exchange is considering taking legal action against dealers who started damaging rumours about the private life of its chief executive, Clara Furse.

The Stock Exchange, which in an unprecedented move denied the allegations on Sunday in a strongly worded statement, yesterday appeared to be narrowing the investigation to concentrate on a number of derivatives traders who it believes started to circulate the rumours about five weeks ago.

The identity of the traders is not known publicly, but some of their views have been reflected on a website run by one former foreign exchange trader, Lee Oliver, who dubs himself "Mr Angry".

Don Cruickshank, chairman of the LSE, strongly denied the gossip about Ms Furse, which centred on her professional ability as well as her personal life.

Mr Cruickshank also attempted to dismiss the whispering campaign against Ms Furse, saying: "From what we understand of the sources of the rumours, it is likely that it is an example of sexism in the City rather than a business-related matter."

Mr Oliver, who yesterday sent out an e-mail to his contacts saying "sexism in the city" contained one too many syllables, said the attacks on Ms Furse were not sexist. He said: "I can never be accused of being sexist. If Clara Furse was a man, the same questions would be asked."

One of the chief areas of concern reflected on Mr Oliver's website is over the LSE's decision last month to pay up to £22m for ProQuote, a technology company which provides share prices. "Having looked at the turnover and results of Proquote, it does not appear to be worth it," Mr Oliver said.

Mr Oliver also pointed out that he has used his website to target the CEOs of other major companies, including BT, Pearson, Dixons and Capita.

The LSE would not comment on whether it was investigating Mr Oliver, but it is thought to be monitoring his website closely.

The body has been looking into the rumours for the past few weeks. The stories started as slights on Ms Furse's professional ability, before turning into attacks on her personal life. The LSE sent a lawyer's letter to most newspapers on Friday warning that it would pursue those that decided to publish the allegations.