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Last Updated: Thursday, 8 December 2005, 13:27 GMT
Tipsters' stock hits rock bottom
By Gavin Stamp
BBC News business reporter

James Hipwell
James Hipwell was found guilty of swindling 41,000
The conviction of two journalists who became known as the "City Slickers" brings the curtain down on one of the most infamous newspaper scandals of recent times.

In late 1999, James Hipwell and Anil Bhoyrul were riding the crest of the wave.

Their daily column in The Mirror offering tips on share buying had become required reading for eager investors looking to stay one step ahead of the crowd.

Dot.com culture

The column's breathless, brash language - readers were urged to "fill their boots", "pile in" and "join the goldrush" - seemed symbolic of the dot.com boom in full swing at that time.

Businesses were springing up all over the place, bankrolled by investors hailing the internet as the new biggest thing.

A copy of The Mirror
The column boosted The Mirror's circulation for a while

Newspapers, as well as budding entrepreneurs, were keen to buy into the idea that life was a gamble and there was plenty of money to be made out there for the shrewd and fleet-of-foot.

For a while, things looked rosy as the City Slickers helped boost The Mirror's circulation, enabling it to thumb its nose at deadly rival The Sun.

Not only was the column getting a lot of attention but it was also having an impact on the share prices of talked-about companies.

Allegations emerge

But allegations soon began to emerge that the tipsters were benefiting financially from their own predictions.

It was claimed they were tipping companies whose shares they already owned, helping to force up their share price and then subsequently selling out at a big profit.

The spotlight also soon fell on the duo's boss, Mirror editor Piers Morgan, who had championed the column in the first place.

Anil Bhoyrul
Anil Bhoyrul pleaded guilty to market abuse

It emerged in January 2000 that he had bought 20,000 shares in Viglen, a technology company owned by Sir Alan Sugar, a day before they were tipped by the City Slickers column.

The shares doubled in value the next day after the company said it was setting up an internet business.

Eyebrows began to be raised at The Mirror and, a month later, the column's bubble burst spectacularly.

Following an investigation, the newspaper fired the City Slickers, accusing them of misconduct for failing to disclose they owned shares in companies they had tipped.

Morgan censured

At the same time, The Mirror cleared Piers Morgan of any impropriety.

Piers Morgan, former Mirror editor
Piers Morgan was cleared following a DTI inquiry

However, the Press Complaints Commission severely censured the newspaper and its editor for their roles in the affair.

The press watchdog concluded that Mr Morgan had failed to prevent the City Slickers from "flagrantly breaching" its professional code.

This forbids journalists from writing about companies whose shares they own without telling their editor, or trading in shares which they have recently written about.

'Cavalier culture'

The scandal was the product of a "cavalier culture" at the newspaper, the PCC added.

Mr Morgan duly apologised and continued in the editor's chair until 2004, while the newspaper industry sought to tighten up its procedures on share tipping and conflicts of interest.

But the story did not end there.

The Stock Exchange had alerted the DTI to the sharp rise in Viglen's share price in January 2000.

The DTI subsequently launched a criminal investigation into alleged insider dealing involving the two journalists and three others.

Charges

In 2004, the two journalists and share trader Terry Shepherd were charged with conspiring to inflate share prices for their own benefit.

The DTI did not bring any charges against Mr Morgan.

Mr Bhoyrul, who now edits a Dubai-based magazine, pleaded guilty to conspiring to breach the Financial Services Act earlier this year.

Mr Hipwell and Mr Shepherd remained defiant, pleading not guilty.

At their trial, Southwark Crown Court heard that the City Slickers had been involved in 44 separate cases of share ramping.

Mr Bhoyrul had fraudulently earnt 15,000 from the scam, while Mr Hipwell and Mr Shepherd had made 41,000 and 17,000.

The journalists, it was claimed, had known at the time that what they were doing was illegal.

Now awaiting sentence, it appears that their own stock has hit rock bottom.



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