Reuters rocked by scandal over staff's undisclosed shareholdings
One of the most prominent financial commentators at Reuters resigned yesterday after admitting that he had owned and dealt in shares while writing about them for the media company's Reuters Breakingviews operation.
Neil Collins accepted he had breached the company's strict internal rules on writers' share ownership and dealings in a resignation email to Hugo Dixon, the editor of Reuters Breakingviews.
A subsequent investigation by the company revealed that two other journalists, Margaret Doyle and Neil Unmack, had also fallen foul of the same guidelines. They will remain with the company.
A total of 53 articles had to be republished with disclaimers highlighting the potential conflicts of interest as a result of the affair.
The articles in question date back to February last year. Companies that Mr Collins was writing about while he owned shares included BP, Marks & Spencer, the directories business Yell and the drinks group Diageo.
Mr Collins was editor of The Daily Telegraph's City section when it broke the "Mirrorgate" share trading story, which detailed the dealings of the Daily Mirror's then editor, Piers Morgan, in the technology company Viglen before it was tipped in the Mirror's anarchic "City Slickers" column.
Mr Morgan was censured by the Press Complaints Commission and one of the column's writers, James Hipwell, was jailed for share ramping, while his colleague Anil Bhoyrul was given a community service order.
There is no suggestion of any deliberate wrongdoing on the part of Mr Collins, nor that he made any financial gains as a result of his breaching Reuters' regulations. It was, in fact, Mr Collins who brought his dealings to the attention of his bosses.
Mr Collins, a prominent and vocal critic of the Financial Services Authority, has made no secret of his interest in share dealing in the past.
While at the Telegraph he made clear to its financial journalists that the paper could hardly encourage readers to invest and save for their retirement if it then barred journalists from doing so by owning shares.
However, the affair still comes at a difficult time, with tensions running high in the UK between the financial media and the Financial Services Authority.
The FSA recently warned all regulated firms that any "first inquiry" from a journalist to members of their staff should be immediately referred to the company's media relations team.
The watchdog said the aim was to clamp down on leaks of price-sensitive information, but senior journalists have accused the FSA of being involved in censorship, and warned that its action could stifle legitimate journalistic inquiry and prevent effective communication between the media and the City.
The FSA has recently begun a crackdown on "market abuse" and taked an aggressive stance against City miscreants seen as breaching rules by using their inside knowledge of deals to reap financial rewards. The crackdown has led to dawn raids on individuals and banks.
Neither the FSA nor Thomson Reuters was prepared to comment on whether the watchdog had been contacted by Reuters about the Collins affair, or whether it would be investigating.
In an email to Mr Dixon, the editor of Reuters Breakingviews, Mr Collins admitted that he had committed a "serious but technical" breach of the rules.
The Reuters investigation into share dealing by its staff is "continuing", according to the editor-in-chief, David Schlesinger. He has urged staff to look carefully at their own market participation to ensure that they comply with its rules.
Independent News Service