Morses Club shares tumble 63 per cent as ex-boss dumps £200,000 of shares before profit warning

The boss of one the UK’s top doorstep lenders dumped around £200,000 of his stake in the firm just before it sounded the alarm on profits to investors today.

Paul Smith, chief of Morses Club, a high-cost consumer credit provider, ditched more than half of his stake in the firm last Thursday.

Smith unexpectedly left the lender today while Morses Club at the same time announced it expects profits to come in 30 per cent lower than previously thought.

The event sent AIM-listed Morses Club’s shares tumbling nearly 63 per cent yesterday.

Smith’s actions are expected to catch the eye of the Financial Conduct Authority (FCA) due to the close proximity of the share sale to the publication of the company’s financial results.

Market moving events such as the release of a company’s results are tightly regulated.

A spokesperson for the FCA said: “As a result of our normal market surveillance, we are aware of these issues. In line with normal policy, we are not able to comment at this stage.”

Company directors are prohibited from leveraging inside information about their business to guide their actions in financial markets.

Morses Club provides loans to consumers with poor credit ratings.

Its products are extremely expensive as they take into account the higher risk of lending to borrowers which are more likely to default.

Interest rates can rise to as much as 498 per cent.

Morses Club listed on the London Stock Exchange in 2016, raising £68.5m from its initial public offering.