The brother of Government minister Baroness Blacks

The brother of Government minister Baroness Blackstone used inside information to make a pnds stlg 3,000 profit in just over 24 hours, a court heard today.

(Thurs)

Public relations guru Timothy Blackstone, 56, later admitted he had been ‘stupid’ to buy 150,000 shares in the company he had only joined a day earlier.

Blackstone then allegedly sold them in the knowledge that his employers Murray Financial Corporation had made a secret pnds stlg 30m takeover bid.

By that time the shares had increased by nearly a third even though the attempt to buy Leek United Building Society was later to be rejected, Blackfriars Crown Court heard.

Prosecutor Philip Katz told jurors: ‘By virtue of his appointment as PR consultant had access to what the law calls inside information.

‘That information was not in the public domain.

If it had been it was likely to have had a significant impact on the price of the shares of MFC.

‘It is not a criminal thing to buy shares.

But it is a criminal offence if you do it in certain circumstances.

‘He was the last person who should have been buying and selling these shares the next day.

‘

Edinburgh-based Murray Financial Corporation Plc was set up in April 1998 to buy building societies and other financial institutions.

Its first high-profile attempt collapsed in May 1999 when news of its bid to buy Hertsfordshire-based Saffron Walden building society was leaked to the press.

Mr Katz said: ‘The idea was this had to be kept secret and confidential.

It killed any element of surprise.

‘Shortly after that failure MFC decided to change public relations consultants.

‘

MFC Chief Executive Kenneth Murray had known Blackstone, a former Sunday Times journalist, since the mid-1980s and was Godfather to one of his children.

Blackstone, brother of Labour arts minister Tessa Blackstone, was formally appointed as public relations adviser at a board meeting on August 25, 1999.

At the same time it was decided to make a pnds stlg 30 million bid for Staffordshire-based Leek United Building Society, codenamed by the board as ‘Opportunity Three.

‘

The meeting was attended by former Tory minister John Redwood, as non-executive director and another PR consultant – Lady Thatcher’s former press secretary Sir Bernard Ingham, the court heard.

Mr Katz said: ‘Mr Murray had insisted if Blackstone became involved in any venture it was paramount that confidentiality was to be maintained.

‘They all knew that Leek’s board was due to meet the next day.

Mr Blackstone was by now fully aware of it and the whole strategy involved.

‘

The shares of MFC had risen from 8.

25p to 8.

75p during that day and at 1.

21pm on August 26 Blackstone made his move.

He bought 150,000 shares costing pnds stlg 13,125 without commission, the court heard.

The same day the Chief Executive of Leek rejected the offer and the decision was faxed to Blackstone at 2.

45pm on August 27.

But Blackstone had sold all his shares only 22 minutes earlier at 2.

23pm – by which time the price had risen to 11p.

‘The profit involved came to pnds stlg 31, selling shares he had had just over 25 hours,’ said Mr Katz.

The MFC bid was made public and the shares suspended at 13pm by the Stock Exchange by September 6, 1999.

Mr Murray then learnt of Blackstone’s share dealing and received a phone call from on December 12.

‘The defendant admitted to Mr Murray that he had done something very stupid,’ said Mr Katz.

‘He admitted he had bought the shares in MFC.

He said that when he realised what he had done was possibly wrong he sold the shares the next day.

‘

Blackstone, of Merrick Square, Elephant and Castle, south London, denies two charges of insider dealing by acquiring shares on August 26, 1999, and disposing of them on August 27, 1999.

The office of his company Blackstone Business Communications is based at (62) Britton Street, City of London.

The trial continues.

ends

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