Writs fly in £10m shares scandal

TOP City firm Winterflood Securities has been drawn into a scandal surrounding stockbroker SP Bell.

Winterflood is being sued by broker Pershing Securities, which claims it has been left out of pocket by the scandal at Bell.

Pershing is also taking action against Bell's former chief executive Simon Eagle and two British Virgin Islands companies linked to Eagle.

Bell collapsed into administration after it emerged in July that the accounts of 75 customers had been used to buy about £10 million worth of shares in computer components company Fundamental-e.

Eagle was also chairman of Fundamental-e and his father is a leading shareholder.

Pershing executed the share buying on behalf of Bell, but once it emerged the trades were unauthorised and customers refused to pay for the shares bought in their names, Pershing was left holding the shares

Its claim against Winterflood, owned by merchant bank Close Brothers, is understood to be that the market maker acted as a go-between in the share deals and is partly responsible for checking whether the trades were authorised.

Winterflood confirmed it was in a 'trading dispute' with Pershing.