Small investors who have lost money in Quindell to sue the company

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Dismissed: Quindell chairman Rob Terry

Small investors who have lost money investing in Quindell are banding together to sue the company.

A shareholder class action case is being prepared against the firm and ex-directors, including founder and former chairman Rob Terry.

Lawyers will argue that Quindell’s public statements were misleading, leading directly to a loss of shareholder value.

Since a share-selling scandal first emerged last month, in which the company was forced to issue several public clarifications and eventually led to Terry’s dismissal, shares have fallen by more than 70 per cent. 

Yesterday they fell by almost 10 per cent to close 3.75p lower at 34.75p – down more than 95 per cent from a peak of more than 660p earlier in the year.

Lawyers will also pursue some allegations raised by Gotham City, the short-selling research firm that caused Quindell’s shares to halve after claiming that its business model was made up.

Quindell subsequently sued Gotham for libel, and won the case automatically because the research group failed to show up in court.

Colin Gibson from Your Legal Friend, which is organising the lawsuit, said: ‘We are very concerned that many shareholders and former shareholders have suffered significant investment losses which may be directly attributable to statements by the company and its board that have proved to be extremely misleading.’

Your Legal Friend is a rival to Quindell in some areas of legal work.

Quindell is already being investigated by the London Stock Exchange over allegations that directors sold shares while sitting on price sensitive information.

There has also been speculation that the group is seeking a new ‘nominated advisor’ – a financial broker that vouches for its stock market behaviour – as it tries to rebuild its City reputation.

Cenkos, its broker and nominated advisor, and Canaccord – which quit as joint broker in October – are also understood to be under investigation by the City watchdog the Financial Conduct Authority over suspected market abuse.

Quindell, the FCA and the London Stock Exchange all refused to comment.

Any Quindell shareholder who wants to join the lawsuit can contact Your Legal Friend on 0800 999 2668.