The firm leading a group action on behalf of Quindell shareholders says it has been contacted by more than 500 investors seeking compensation.
North-west firm Your Legal Friend (YLF) announced six months ago it was mounting a legal challenge on behalf of shareholders who may have lost money as a result of allegedly misleading statements about profit figures.
Quindell’s share price fell by 85% to 33p in the year to December, though it had recovered to 124.75p before trading was suspended earlier this week.
Your Legal Friend says this week’s announcement that the Financial Conduct Authority (FCA) is to investigate Quindell’s reporting practices has accelerated the progress of the action.
Colin Gibson, chief operating officer, said the investor action will now move ‘to the next stage’ and announced the appointment of Philip Marshall QC as lead counsel for the potential group action.
In a statement, the firm confirmed it has been contacted by more than 500 Quindell investors who have expressed interest in pursuing a claim for compensation.
It added: ‘YLF welcomes the FCA’s decision to investigate the published statements of the company during 2013 and 2014.
‘The firm considers this to be a significant endorsement of its view that Quindell must now address a number of pressing questions regarding the financial information contained and reported in its public statements.’
YLF said the number of potential investors looking to join the group action is continuing to grow.
Quindell - which claimed to be the largest listed legal services provider in the world before its professional services division was sold to Slater and Gordon - has pledged to co-operate fully with the FCA investigation, which is happening alongside an internal review of accounts reporting.
It has already said that changes to the group’s accounting policies will see the company ‘adopt a more conservative and appropriate approach’ to the recognition of revenues and profits.
Quindell has yet to comment on the YLF group action.