Numis to pay $8m Rock Well settlement

Fidelity had been claiming damages of $95m in respect of money it put into a share placing by Rock Well Petroleum.

The action for "fraudulent misrepresentation" by Fidelity was precipitated by Rock Well and Numis failing to disclose to the market that Rock Well was facing a possible lawsuit from a third party, Omega Oil.

The claim was initially dismissed by Numis when it first emerged in August last year. At the time the company put out a stock market announcement calling the action "entirely spurious and unfounded".

The $8m settlement comes at a sensitive time for the company.

As revealed by The Daily Telegraph Numis recently had to apologise after its sales team put out misleading statements about communications group Avanti.

Although the company's shares enjoyed a significant bounce yesterday on the back of the settlement, up 8.15pc, they are down nearly 12pc since the start of the year.

Numis settled the dispute with Fidelity without any admission of liability.

When asked whether it apologised as part of the settlement a spokesperson declined to comment.

The parties have signed non-disclosure agreements about the settlement.

In an agreed statement to the market Numis said: "Numis and Fidelity are pleased to put an end to this distracting litigation and look forward to a continuing and mutually beneficial commercial relationship."

The agreement with Fidelity also covered a joint action being taken against the stockbroker by London-based hedge fund CQS.

Both CQS and Fidelity declined to comment.