Collins accuser 'offered £457,000'

THE row at Collins Stewart took another twist last night when it emerged that the stockbroking firm offered to pay £457,000 to sacked 'whistleblower' James Middleweek if he retracted his explosive allegations.

Middleweek accuses the firm of sharp practices including market manipulation, poor quality share issues and giving inside information to market makers.

Collins Stewart denies the claims, but growing concerns over the row knocked shares another 30p to 427 1/2p yesterday.

The company sacked Middleweek, an equity analyst, for alleged gross misconduct on 9 July. It claimed he was using the accusations as blackmail to obtain £2.4m severance.

But on 14 and 17 July the firm offered him £50,000 in lieu of notice, and £407,000 reflecting the value of shares forfeited when he was sacked.

Chief executive Terry Smith says the offers were 'the minimum' which Middleweek would have got if he had left under normal circumstances. He said they were made on condition that Middleweek 'agreed that the accusations were false'.

Smith angrily denies any suggestion that the offers were made to keep Middleweek's documents from the Financial Services Authority.

'The minute we received these allegations we sent them to the FSA ourselves,' he said. Smith met City police yesterday to detail his blackmail accusations.

Middleweek and his lawyer Dale Langley 'categorically deny' the allegations.