Probe into insider claims at Collins

SIR Howard Davies, chairman of the Financial Services Authority, has asked a 'senior level' official to look into market abuse accusations made against broker Collins Stewart.

Davies told the Daily Mail that allegations of insider dealing and share ramping against Collins Stewart are 'being looked into in a very urgent way and handled at a senior level. We take it seriously'.

The FSA boss confirmed that the City watchdog has conducted a 'serious' interview with the dissident broker James Middleweek 'and there may be more'.

The FSA was not fully satisfied with the material received from Collins Stewart in the shape of a report from its lawyers Clifford Chance.

'The company have sent us the Clifford Chance report and we have asked for more material relating to that. We are actively engaged in this case,' Davies said in an interview at Canary Wharf.

Davies's decision to speak out points to his determination that the watchdog becomes more responsive to concerns about City misconduct once in the public domain.

'What we are engaged in with Collins Stewart is trying to sort out the different allegations,' Davies said.

'You've got something which also involves employment law and damages in it. Then there is the case against the Financial Times, so it is complicated territory and you have to proceed with care,' he added.

The broker has launched a damages writ against the FT after it published allegations made in a court document.

'We recognise it is incumbent upon us to say what we plan to investigate and what we don't,' Davies said.

'Clearly if there is smearing or accusations, we need to winnow those down.'

The broker said it was glad the FSA was taking the matter seriously.

'This is not something we would want at the bottom of the in-tray.'