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Broker Widens Probe Into Suspicious Trades

(c) Sky News 2012

The City stockbroker WH Ireland has suspended one of its most senior executives as part of a broader inquiry that led to the departure on Thursday of its chief executive.

WH Ireland is understood to have placed Barrie Tyler, who runs its Cardiff office, on leave pending the outcome of an investigation into a string of personal share trades carried out by executives at the firm.

On Thursday, Paul Compton, WH Ireland's chief executive, left with immediate effect after just two years in the job.

People familiar with events at the firm said WH Ireland's compliance staff had raised concerns about a number of Mr Compton's share dealings through what are known as Suspicious Transaction Reports (STRs).

I have learned these related to trading in shares in companies including Cape (LSE: CIU.L - news) plc, a facilities management company, and Rockhopper Exploration, an AIM-listed oil and gas company with interests in the Falkland Islands.

Mr Compton is understood to have sold Cape shares shortly before one of several profit warnings earlier this year, and traded shares in Rockhopper on several occasions.

A friend of Mr Compton, a former executive at Collins Stewart, said he had disclosed his personal share dealings to WH Ireland's compliance staff himself.

The STRs were flagged to officials at the Financial Services Authority (FSA), which is now understood to be examining the information supplied to it by WH Ireland's compliance managers. It is unclear exactly how many STRs were raised in relation to the former chief executive's personal trading activities.

Mr Compton, a prominent City figure, sold a large chunk of his shareholding in WH Ireland following his sacking on Thursday

Neither Mr Tyler nor Mr Compton has been accused of any wrongdoing.

The FSA is believed to have raised concerns about Mr Compton's share dealings during his time with a previous employer. The regulator is also understood to have taken almost nine months to provide the necessary authorisation for him to take up his role at WH Ireland, a much more protracted process than would have been expected.

On Friday morning, the firm - one of the City's oldest stockbrokers - issued a trading update that was designed to reassure the City about its prospects following a 24% slump in its shares yesterday.

It insisted it was performing well and it had "achieved a good balance between investing in the business and a continued focus on the cost base, and further strengthened the balance sheet with an improved net cash position at the year end compared to the prior year. A capital reduction process has also just been completed that will enable the Group to return to the dividend list and initiate share buybacks, when deemed appropriate".

Rupert Lowe, the former Southampton FC chairman who chairs WH Ireland, added: "The Group has made good progress in 2012. While underlying markets remain challenging, momentum with corporate client wins, an increasing pipeline of corporate finance work and a reinvigorated strategy within the Private Wealth Management business, enable us to look to 2013 with cautious optimism."

WH Ireland's other shareholders include Lord Marland, the Government minister, David Ross, the co-founder of Carphone Warehouse, and Mr Lowe.

The FSA and WH Ireland declined to comment. Mr Compton could not be reached for comment, while WH Ireland's Cardiff office said that Mr Tyler was on holiday.