FOUR City advisers who received suspended prison sentences at the end

of the year-long Blue Arrow fraud trial were cleared by the Court of

Appeal yesterday.

The court's reasons for quashing the convictions of Mr David Reed, Mr

Nicholas Wells, Mr Martin Gibbs, and Mr Jonathan Cohen will be given at

a later date.

At the end of the Old Bailey trial last February, the four were

convicted of plotting to deceive financial markets over the result of

the #837m Blue Arrow rights issue in 1987, launched to finance the

company's bid for the employment agency, Manpower.

They were found guilty of lying about the take-up level of shares by

saying it was 48.9% rather than only 38%, and of secretly buying shares

to give the impression of a successful issue.

Mr Cohen, 48, Mr Reed, 44, and Mr Wells, 37, all senior executives of

County NatWest, the merchant banking arm of National Westminster Bank,

received 18-month suspended sentences. Stockbroker Martin Gibbs, 62, a

former director of UBS Phillips and Drew, received a 12-month suspended

term.

The appeal Judges, Lord Justice Mann, Mr Justice Ognall, and Mr

Justice Buckley, heard argument during a two-day appeal that the trial

was unfair because of the weight and complexity of the case presented to

jury, and because the trial Judge, Mr Justice McKinnon, limited his

summing-up to one issue and told the jurors to ignore 75% of the

evidence.

The Crown argued that Mr Justice McKinnon kept ''constant vigilance''

on the manageability of the case, and his decision to limit the

summing-up worked to the advantage of the defendants. There was no

evidence that the length and detail of the case caused the jury any

difficulty.

After the appeal Judges gave their ruling, Mr Reed said: ''I'm

absoultely delighted. It's been three long years.'' Asked if he had

thought he would win the day, he said: ''You don't think at this stage.

I've had my hopes built up before.''

Mr Cohen said: ''For the moment I am delighted. I can't make a further

statement until I've seen the judgment but I shall want to say something

then because I feel very strongly about a lot of matters in this case.''

Mr Gibbs said: ''I'm delighted, of course, but this is much more

important for the others than for me. They are younger men who have

families and still have careers. I retired three years ago but I am glad

to have my name cleared.''

An official of the Serious Fraud Office said she would not comment

until after the full judgment had been given.

During the Old Bailey trial, Mr Stephen Clark, County NatWest's group

finance director, and Mr Alan Keat, a partner in solicitors Travers

Smith Braithwaite, were acquitted. Three corporate defendants -- NatWest

Investment Bank, County NatWest, and UBS Phillips and Drew -- were also

found not guilty. UBS director Christopher Stainforth, 38, was acquitted

by the jury.

In the appeal, counsel for the convicted men argued that Mr Justice

McKinnon's end-of-trial decision to sum up to the jury only in relation

to one particular issue -- whether the men agreed to lie about ''late

take-up'' of shares -- constituted a material irregularity. Evidence on

the other issues had mostly been given at the start of the hearing.

Mr Reed's counsel, Mr Anthony Hooper, QC, said it would have been

possible to concentrate from the beginning on the one issue with which

the jury was eventually left.

''The trial Judge was invited by the defence to cut the case down but,

at the insistence of the prosecution, failed adequately to do so,'' said

Mr Hooper. ''When a prosecutor is faced with a case of this type, his

primary duty is to proceed in a way in which there is a reasonable

prospect that justice will be done -- that is to ensure the acquittal of

the innocent.

''There is no such thing as a crime that has to be prosecuted at

enormous length if you risk the conviction of the innocent.''

At the end of the trial, which was the second longest in this country

and cost nearly #40m, Mr Justice McKinnon called for reform to prevent

such lengthy hearings in future.

He said: ''No jury should be asked to cope with what they have had to

endure. No defendant or his family should have to suffer through month

after month after month after month all that these defendants have had

to suffer. There must be some other way.''

He made no costs order against the convicted defendants and did not

fine any of them or disqualify them from directorships.

The question of the costs of the appeal will be dealt with after the

Judges have given reasons for yesterday's decision.