THE BOSS of one of 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 yesterday.

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

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

The saga 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.

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

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CONTINUED FROM FRONT PAGE 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.

The high-cost credit sector has come under intensifying scrutiny recently due to customers lodging complaints over being mis-sold loans.

Amigo Loans, the guarantor lender, has been besieged by a wave of historic customers seeking compensation for alleged misselling. Provident Financial left the doorstep lending market altogether last year.

Morses Club was created over 100 years ago in Swindon. It listed on the London Stock Exchange in 2016, raising nearly £70m from its initial public offering.

The company did not specify why Smith, who led the firm before the listing, had left his role.

(c) 2022 City A.M., source Newspaper