FSA’s stern warning to rogue traders

UK regulator publishes warning to rouge traders as banking shares take a nose dive

LONDON – The Financial Services Authority (FSA) has confirmed that it investigating trading in UK financial shares following the dramatic plunge in HBOS’s share price. Both the FSA and the Bank of England quickly dispelled rumours that the bank had liquidity problems as the result of unfounded rumours assumed to have been spread by traders hoping to profit from the turmoil.

Sally Dewar, managing director, wholesale and institutional markets at the FSA, said: “There has been a series of completely unfounded rumours about UK financial institutions in the London market over the last few days, sometimes accompanied by short-selling. We will not tolerate market participants taking advantage of the current market conditions to commit abuse by spreading false rumours and dealing on the back of them.

“We remind market participants of the need to take extra care, in this market climate, to adhere to the market code of conduct.”