Gotham City defends its £1bn Quindell attack

Oliver Smith
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MYSTERIOUS US short seller Gotham City Research yesterday defended its attack on Quindell, the Aim-listed insurance firm whose shares plummeted 39 per cent last week following a scathing blog post by Gotham, as an “expression of free speech”.

On Friday Quindell published a 12,500 word response to Gotham’s allegations, in which vice chairman Tony Bowers said a number of the firm’s directors had committed to purchasing shares in the firm: “I hope with this extensive response to the Gotham ‘research’ that investors will be reassured as to the company’s transparent approach to investor relations.”

Quindell’s market value remains around £950m short of its capitalisation prior to Gotham’s publication of its research note titled: “Quindell: A Country Club Built On Quicksand”

“Gotham City Research is a firm believer of a free society, democracy, and free speech. Consequently, we believe that short selling and activist investing are extensions of free speech, exercised and practised in the financial markets,” Gotham told City A.M. in an email yesterday.

Quindell on Friday said it has initiated legal action against Gotham City in what it calls a “coordinated shorting attack” and has reported Gotham to the Financial Conduct Authority.

Davide Serra, the chief executive of hedge fund Algebris Investments, who holds a two per cent stake in Quindell yesterday said that he has also reported Gotham City’s actions to both the FCA and the US Securities and Exchange Commission.

Quindell had planned to publish plans for a move to London’s main market last week. “The board continues to target the company’s move to the main market, as stated previously, and is looking forward to our US investor roadshow next week,” said Bowers on Friday.