The FSB said on Wednesday it had closed its investigation into Woollam’s trading in Lewis shares and found no evidence of insider trading by Woollam.
The FSB’s investigation was launched in March following a complaint by the Lewis board that Woollam had been deliberately trying to drive down the share price to support his short-trading position in Lewis stock.
The FSB investigation was regarded as a critical sideshow in the continuing and precedent-setting legal battle between Woollam and the Lewis board.
Woollam is also a partner in Summit Financial Partners, which is campaigning to clean up unsecured lending practices.
In early June, Woollam served a Section 165 notice on the Lewis board requiring it to take legal action against four directors.
If the four directors were found to have been delinquent, as charged by Woollam, they faced the risk of personal liability. The four directors are CEO Johan Enslin, chief financial officer Les Davies, board chairman David Nurek and chairman of the audit and risk committee Hilton Saven.
The Lewis board told shareholders in June that Woollam’s action against the company was part of a concerted attempt to drive down the share price.
The board said a weaker share price would financially benefit Woollam because he held a 'long-standing' short position in Lewis’ shares at the time of his campaign against Lewis.
Woollam confirmed he had previously held a short position in Lewis (one of the most shorted shares in emerging markets), but at no time since initiating his legal action did he have a short position.
In June, Lewis reminded shareholders the FSB was engaged in an investigation into possible insider trading in Lewis shares by Woollam. If Woollam wanted his legal action to proceed he would have to persuade the court he was acting in good faith.
On Thursday, Woollam said he had received a letter from the FSB confirming the investigation had been closed and that no further action would be taken against him. "I have always said there were never any grounds for this complaint against me, there were never any grounds for Lewis to claim I was in any way involved in insider trading, market manipulation or market abuse," said Woollam.
A spokesman for Lewis said on Thursday evening that the company’s legal advisers had been told by the FSB that it was continuing to investigate market manipulation in Lewis’ shares by Woollam, but he could provide no evidence of this.
The press release issued by the FSB’s directorate of market abuse makes no reference to any other investigations into Lewis. Bert Chanetsa, the deputy executive officer of the FSB, said: "The press release is accurate, the people at Lewis are misinformed."
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