The Serious Fraud Office (SFO) is investigating allegations of insider dealing through information leaked from a security printer.

Five suspects have been released on bail pending further police enquiries. It is thought that the security printer, which the SFO declined to name, is one of a handful used by investment banks in London.

It is alleged that employees of the firm passed on confidential information about takeover bids to third parties, enabling them to buy shares in companies before bids were made public knowledge and the share price rose.

Bob Hodgson, chairman and chief executive of City security printer Greenaways, said he had never heard of a case like this before. "Confidentiality is paramount in our business. Most employees of security printers are of many years standing. If this is proven it will be devastating."

He added that procedures such as coding were commonly used and could not speculate on exactly how information could have been leaked.

BPIF corporate affairs director Mike Hopkins (pictured) said that he didnt see the case causing further implications for security printers.

"Credible printers have a good reputation in the area I dont see this as indicative of a general problem. All printers have access to lots of privileged information, and they always have a responsibility to their clients," he said.

According to some sources, the investigation, involving both City of London police and the SFO, has been underway since last summer.

An SFO spokeswoman said the timescale of investigations varied from case to case, and as such could not comment on when and if any charges might be brought.

Story by Fay Schopen