FT: Peston is a Good Fella, But, Yeah, That Lloyds/HBOS Thingo is Def. Dodgy

The FT has come out in defence of BBC business editor Robert Peston over allegations by conservative MP Greg Hands that he is the pet of industry and some kind of accidental lapdog (lapturtle) for insider trading masterminds.

“The first thing to be said is that the stories objected to were all correct. Even if Mr Peston’s sometimes breathless delivery is not to everyone’s taste, no one is disputing that. The insinuation is that he is somehow being used by people in the government and the City, where he is known to have good contacts.

If there were leaks that breached regulatory rules then, by all means, investigate the leakers, especially if anyone leaking is found to have profited from it. Yet many people, for example, had reached the conclusion that the government would have to step in to recapitalise major British banks. Many bankers had, too. After Mr Peston’s report that this was indeed going to happen, shares in the banks affected fell precipitately. One must surely assume that investors would have reacted the same way after an official announcement but, because they gave such credibility to the report, this sell-off took place earlier.”

Yup, yup, sure… but what about the real meat of Hands’ allegation, that he got totally done over by some insider traders when he announced the HBOS/Lloyds merger?

“In the case of Mr Peston’s scoop on the Lloyds takeover of HBOS, there appears to be some evidence that there was heavy trading in HBOS shares minutes before he went on the air. That is a legitimate subject of investigation – not the fact that the story turned out to be accurate. After all, Financial Services Authority research suggests about a quarter of all takeovers are preceded by insider trading.”

So the FT basically agrees with Greg Hands then that something funny happened with that HBOS/Lloyds merger. As mentioned before, no one is saying Peston profited, and in the end what he said was true (otherwise, er, it wouldn’t have rallied the market and made someone a potential £23.8 million in under an hour). But fellas, this is clearly not over… Will be interesting to see if/when Peston responds on his BBC blog (nothing as of yet), given he openly responded to allegations of moving the market in his Sunday Times‘ My Week diary slot on Oct 12.

Keep your head up Peston, you can make it…

Posted by Jonty Rhodes in Hot Money | October 20, 2008 10:09PM |