AN investment analyst has gone on trial in the High Court charged with

an insider dealing offence involving more than #1.3m.

Mr Thorold Mackie is alleged to have been in breach of the Company

Securities (Insider Dealing) Act 1985 while working with Edinburgh

stockbrokers Bell Lawrie White and Co.

Mr Mackie, of Craigcrook Road, Edinburgh, denies the charge which

states that he was in possession of ''price sensitive'' information,

namely the issue of a profits warning by Glasgow construction and waste

disposal firm Shanks and McEwan.

It is alleged that he knowingly obtained the information from Mr Peter

Runciman, who at the time, was chairman of Shanks and McEwan, and,

between September 6 and 12, 1991, procured Allan Thom and Colin Telfer,

both salesmen with Bell Lawrie, to deal in Shanks McEwan shares on the

London Stock Exchange.

The indictment states that 1,951,400 shares were sold on behalf of

Bell Lawrie clients at prices ranging from #3.04 to #3.18. This, it is

claimed, avoided the consequent reduction in share prices after the

profits warning was issued on September 19, 1991.

Shares are said to have been sold at prices which realised #1,378,892

in excess of what would have been realised had they been sold after the

issue of the profits warning.

The charge relates that the highest price quoted at close of business

following the warning was #2.70.

Mr Runciman, 64, and now retired, told the High Court in Edinburgh

that in the summer of 1991 investment analysts were sending out

circulars recommending Shanks and McEwan shares as a ''good buy'' and

predicting pre-tax profits of up to #42m.

However, the first warning of problems for the company arose at a

board meeting in August 1991 when it was realised that a major contract

expected in the first half of the year was not going to materialise.

There was also a slight downturn in business generally.

An executive meeting took place on September 5 when there was general

agreement that the firm's situation was deteriorating and that the

profits projected by analysts were unattainable.

Mr Runciman said the way forward had been clear. Share prices in the

company were still rising on the basis of the earlier profit figures

which were now seen to be based on information which was quite wrong.

There was a material deterioration in the prospects of the company and

under stock exchange rules this information had to be made known as

early as possible. It was decided that a profits warning should be

issued to the stock exchange.

Mr Runciman explained that such an announcement would come as a

bombshell and the price of Shanks McEwan shares would ''go down a long

way''. He said that to the best of his knowledge no-one outside the

company knew what was being discussed at the meeting of September 5.

Mr Runciman will continue his evidence today.