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Last Updated: Wednesday, 20 October, 2004, 10:28 GMT 11:28 UK
Judge dismisses case against FT
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Allegations of insider trading were made in the FT's article
A controversial special damages claim that threatened to cripple the Financial Times (FT) has been struck out by the High Court.

Mr Justice Tugendhat ruled that a record 230.5m ($415m) claim over an article the FT wrote about stockbroker Collins Stewart was "untriable".

Collins Stewart had alleged in its special damages claim that the article caused a 16% drop in its share price.

However, the firm still plans to pursue a 37m claim for lost business.

Dark day

The Financial Times said it was "extremely pleased" at the judge's decision, describing the damages claim as "manifest nonsense and untenable in law".

"It would be a very dark day for journalism and for a free press if publishers were to be held liable for a drop in share prices following publication of an article reporting on company events," said FT editor Andrew Gowers.

Collins Stewart, however, plans to pursue its libel action against the newspaper and it is expected to go to court in April next year.

"There remains the general damages claim for 37m, which represents the quantifiable amount of lost business and profits we suffered as a result," a spokesman for the stockbroker said.

Meanwhile, the FT said it had no plans to open settlement talks with Collins Stewart.

On the line

The basis for the FT's article headed "Reputations on the Line at Collins Stewart" was a court filing by sacked investment analyst James Middleweek against his former bosses at Collins Stewart.

Mr Middleweek took his case to the Financial Services Authority (FSA), alleging that his former employers had been involved in insider trading.

The newspaper argued that the filing put the allegations against Collins Stewart in the public domain - therefore making it exempt from legal action.

However, Collins Stewart said the FT's subsequent article was a "detailed, extensive, one-sided and damaging report" and decided to sue.

Several other newspapers also reported the allegations.

The FSA cleared the company of Mr Middleweek's claims back in August.

Last week, Mr Middleweek and Collins Stewart reached an agreement over the allegations, and he dropped his claims against the firm, including that of wrongful dismissal.

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