US short sellers have been a bugbear for the company in recent months, acting as a serious drag on the share price. Riverdeep's recent move to relinquish its Nasdaq listing is believed to have been aimed squarely at such traders.

Riverdeep has denied that it is or has been subject to an investigation by the US Securities and Exchange Commission (SEC).

The educational software group made the statement yesterday in a bid "to clear the air" following recent press reports, a company spokesman said. However, sources suggested the statement may partly have been aimed at flushing out short sellers of the stock.

At the time it announced the de-listing, Riverdeep chief executive Mr Barry O'Callaghan said that holders taking short positions in the stock were unlikely to continue such a practice in Dublin.

However, market sources said last night that one US investor continued to hold a significant short position in the stock. The de-listing had failed to flush him out and the announcement that the company was not the subject of a SEC investigation was seen as another attempt to do so.

The spokesman declined to comment except to say the statement was "a continuation of the process to concentrate trading of the stock in one market".

Riverdeep said in the statement that it had applied to the SEC to terminate registration of its securities. It also said that it would continue to report on a quarterly basis.Given that its only listing is now on the Irish Stock Exchange, the company is only required to report twice a year but it plans to stick with quarterly releases to "maintain consistency for investors", the Riverdeep spokesman said.

However, there is unease among investors over Riverdeep's strategy. One investor said last night that Riverdeep management was losing credibility. The decision to leave the Nasdaq remains a particular cause of concern.

Riverdeep shares closed unchanged at €1.10 last night with 152,500 shares changing hands.