View more on these topics

FSA finds no manipulation in HBOS rumours

The FSA says it has not uncovered evidence that market rumours surrounding HBOS were spread as part of a concerted attempt by individuals to profit by manipulating the share price.

The regulator’s investigation, conducted by the enforcement, markets, supervision and intelligence division, found that while the rumours would have had some impact on HBOS’ share price, there was no evidence of wrongdoing.

On March 18 the HBOS share price closed at 480p. Prior to market opening and throughout March 19 rumours circulated that the bank faced funding difficulties.

Some reports claimed that the Governor of the Bank of England had cancelled his travel plans in order to resolve a liquidity problem at HBOS and that the Bank of England was “bailing out” the bank.

Many market commentators speculated that the fall in the HBOS share price was the result of unscrupulous traders who spread false rumours to make unjustified profits, having earlier short sold the shares.

Following the investigation the FSA markets division has launched a review of the systems and controls at firms for dealing with rumours.

It says: “Specifically, we are examining what policies are in place and how firms ensure compliance with them, whether and how rumours are verified, whether traders are permitted to pass on or trade on rumours and how firms ensure staff do not initiate or spread false rumours.

“This exercise is covering a range of investment banks, securities firms and hedge fund managers. We will communicate our findings to the market in the early autumn.”


Normal service will resume

It is clear that Abbey has finally overhauled the mighty HBOS in share of the mortgage market. In happier times, brokers would have been more than pleased to see this happen as it would have meant an injection of competition and a big challenge to the presumed market number one.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm