The financial services authority (FSA) has cleared Michael Page of misleading investors into backing the company’s £650m flotation in April. The four month investigation was instigated by a sudden profit warning in June, just after its stock market debut.

The FSA’s investigation is understood to have considered whether the recruiter made accurate projections about its businesses at the time of its float in June, and whether it acted quickly enough to inform investors of a change in its commercial circumstances.

The regulator scrutinised the information in the prospectus accompanying the share sale, which only went ahead by reducing the value of the shares to 175p. Advisers Credit Suisse First Boston originally estimated the shares were worth 190-250p.

Michael Page was bought by American staffing group Spherion in 1997 for £330m. Even though the shares were sold at a reduced price the IPO was hailed as a success as it took place during difficult market conditions and made Spherion a profit of over £300m.

Under the UK’s listing rules, companies must take all reasonable care to ensure that any statement or forecast is not misleading, false or deceptive. They must also inform investors without delay of any change in their financial position or performance.

On 11 December a statement by the company claimed that ‘the trading outlook for the year is in line with the consensus of analysts’ expectation.’ Analysts are forecasting a pre-tax profit of between $49.1m and £60.2m for 2001. The 2001 forecasts have fallen by 8.6% over the past three months. Full year results are due to be announced on 25 February.