Hedge fund manager Davide Serra alleges price manipulation in shorting attack on Quindell

Shares in the Aim-listed company, whose clients include RSA Insurance Group and RAC, plunged 39pc on Tuesday after a US short-seller, Gotham City Research, published a scathing attack which caused almost £950m of its market value to be shed.

Mr Serra, who last June was photographed entering Downing Street carrying a presentation on Royal Bank of Scotland, said that after Gotham’s accusations, he lodged a complaint with the Financial Conduct Authority and the US Securities and Exchange Commission, alleging that price manipulation and insider trading had taken place.

Little-known Gotham started coverage of Quindell with a note headed “A country club built on quicksand”, in which it warned readers that shares — which began the week at 39p per share — were “worth no more than 3p per share” and that it stood to profit if Quindell fell.

Quindell has said that short positions were taken ahead of the publication of Gotham’s allegations and that it has begun legal action against “what it believes to be a co-ordinated shorting attack”.

The business, which provides services to the insurance industry, has also informed regulators.

Mr Serra, an Italian who founded London-based Algebris in 2006, has strong political connections. Last May, he spoke at a UK Trade and Investment conference in the presence of David Cameron, but he reached greater prominence when he was pictured on his way to a meeting with a No 10 official carrying an RBS briefing document, likening the state-backed lender to “the large Canadian banks”.

Quindell’s shares ended the week at 24½p, down 34pc. A spokesman for the FCA declined to comment.

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