(Reuters) - The London Stock Exchange (LSE) is in the early stages of investigating Quindell Plc's (L:QPP) 19 percent share slump on Monday, the Telegraph reported on Tuesday, without citing any sources.
The Telegraph said the LSE was looking into the AIM-listed stock to decide if any rules had been broken in the run-up to the price fall, which was triggered by the resignation of Quindell's joint broker Canaccord Genuity.
The paper said the exchange was believed to be looking at whether there was a breach of Rule 11 of the AIM code, which states that a company must immediately inform the market of any sensitive information that might move its share price.
Quindell stock declined sharply on Monday after the IT outsourcing firm said Canaccord resigned as its joint broker nearly four weeks after having served notice.
The LSE and Financial Conduct Authority both declined to comment when contacted by Reuters. Quindell did not immediately respond to a request for comment.
Neither Quindell nor its broker Cenkos has been contacted by the exchange, the Telegraph said.
The paper added that if Quindell was found in breach of LSE's rules, the possible penalties included sanctions and a fine.
The news of the probe comes after Quindell on Tuesday said its founder Robert Terry resigned as chairman days after the company disclosed a complex share transaction involving Terry and two other directors, who will also leave the board.
Quindell's shares were down 8.3 percent at 49.50 pence at 0847 GMT on Wednesday. The company has shed more than 2 billion pounds of its market value over the last few months.
(Reporting by Noor Zainab Hussain in Bangalore, Additional reporting by Carolyn Cohn in London; Editing by Savio D'Souza)