The Financial Services Authority is probing public sector outsourcing contractor Connaught, after a director sold shares in the firm before a profit warning last month.
Peter Jones, managing director of Connaught's northern business, made 拢264,953 by selling shares on 21 May and 23 June, just ahead of a announcement by the group of a shortfall in its revenue.
Connaught confirmed that it had received requests for information from the FSA, though the City watchdog has not yet launched a formal investigation of the firm.
It's the latest in a series of blows to affect Connaught, which , after admitting it would break its banking covenants due to mounting debts.
The news caused a further two-thirds to be wiped off the group's share price, which has now lost 90% of its value since June's profit warning.
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