Closed doors for the whistleblower

THE City will forgive many things --bullying, drugs, drunkenness, sexual harassment. The powers in the Square Mile have learned to turn a blind eye to them all. As long as deals are done and big money keeps changing hands, they're happy.

But there is one thing that is still regarded as unforgivable. Blowing the whistle, or being a 'bad leaver' daring to sue your former bosses will guarantee that every door will slam in your face.

It is a lesson former investment analyst James Middleweek is learning fast. Next week, he leaves for Australia, taking his wife and two young children with him.

Since he went public with allegations about sharp practices at his former employer broker Collins Stewart, Middleweek, 38, has discovered the price of speaking out.

Collins Stewart suffered a huge hit to its share price when the allegations were published and, like Middleweek, it too is being investigated by the Financial Services Authority. But its corporate armour remains largely intact - very much business as usual, according to its bosses.

The same cannot be said for Middleweek. He has been besieged by journalists, questioned by the police over allegations of blackmail and made the subject of a series of rumours and smears.

And having broken the City's unwritten code of omerta, he is unlikely ever to re-enter the world of investment banking. Hence his decision to quit the country.

Officially, Middleweek says it is simply a 'well-earned break', but friends say he is unlikely to return except for the odd family visit and for next year's expected High Court showdown with Collins Stewart and its combative boss Terry Smith.

In August, when Financial Mail obtained the legal documents outlining Middleweek's case, it created a shockwave in the City and wiped £250m off the brokers' stock market value.

Before the furore, Middleweek had the reputation of a quiet man. In the words of a former boss: 'You would not expect him to say boo to a goose.'

Middleweek was recruited by Collins Stewart in 1996 on a basic salary of £55,000 - his bonus was £50,000. In 2000, his bonus hit £120,000. By 2002, his salary was £95,000 and, according to court documents, in a disastrous year for the City that saw many high-fliers receive no bonus at all, he still picked up £50,000.

But by early this year, things had changed - Middleweek started to row with his bosses. There are two very different versions of what happened. Middleweek told friends that he realised he was being squeezed out. 'I've gone ex-growth here,' he said to one friend, using City slang for a company whose glory days have passed.

His bosses say this was because he had ceased to take an interest in his work. 'He used to sit around reading the Racing Post and the Jewish Chronicle,' one source told Financial Mail.

Middleweek's friends say that he had become uncomfortable with what he was asked to do. During the spring, both sides started raising formal grievances. Middleweek's allies say this played to his strong suit.

A former boss said: 'James is a lawyer. He is also a meticulous, painstaking note-taker. He has records on his records.'

In the summer, he was fired and he sued for wrongful dismissal. In talks between his lawyer and the company, the subject of the FSA dossier was discussed while Smith secretly taped the meeting. Middleweek was accused of attempting to blackmail the firm by offering not to inform the FSA in exchange for a multi-million pound pay-off.

Middleweek was quickly cleared of blackmail, but this was only the start of a brutal war of nerves. In one instance, the analyst claims to have found a tracking device attached to his car. Collins Stewart strongly denied any involvement.

And details were leaked to the Press of how a fund manager sold Collins Stewart stock after Middleweek called him to say Financial Mail was writing about his case.

Middleweek said he had been the victim of other smears. One suggested he was a penniless gambling addict who was having to borrow to fund his court case.

But Middleweek showed clearly that he has liquid assets running to six figures after selling his London home.

A string of other stories has done the rounds - so far unsubstantiated. Now, he will find out whether the other side of the world is far enough away from the shadow of the Square Mile for anyone to offer him a job.