Quindell investors kick off legal proceedings against insurance group over claims it misled stock market about its financial health
Quindell investors have kicked off legal proceedings against the insurance group over claims it misled the stock market about its financial health.
Law firm Harcus Parker has written to the firm, which is now known as Watchstone, claiming shareholders were left nursing heavy losses as it kept making ‘upbeat’ announcements despite being in trouble.
The letter is the first step towards a court hearing. The London lawyers are representing around a dozen institutional and private investors.
Hit hard: Law firm Harcus Parker has written to the firm claiming shareholders were left nursing heavy losses
AIM-listed Quindell’s share price rocketed between 2012 and 2014, valuing it at around £2.7 billion. But it then nosedived as short-sellers targeted it and a US hedge fund questioned its business model.
Share trading was later suspended after the Financial Conduct Authority began investigating its accounts and Quindell’s founder Rob Terry.
Things came to a head in 2015, when Terry was pushed out and the accounts for 2012, 2013 and 2014 were restated, including turning 2014’s £83m profit into a £68m loss.
Auditor KPMG was fined £3.2m and Quindell’s broker Cenkos was fined £531,000 for its role in the debacle.
Officers at the Serious Fraud Office have spent the past four years probing what went on at the firm between 2011 and 2015.