According to reports, the shareholders feel aggrieved that they were not informed about the size of the loan that the Government lent to HBOS in October 2008, and claim they were misled into voting for the HBOS takeover. The loan is believed to be around £25.4bn and was not disclosed until November 2009.
About 500 shareholders have now joined the group, called Lloyds Action Now, which aims to recover some of the £14bn lost in the value of their shares after the merger.
The group has sent demands for compensation to the Treasury and Lloyds directors, and it has given 90 days for a response before the group takes legal action.
In April, Lloyds announced that it had returned to profit in the first quarter of 2010, although there were no precise figures in the management statement.