Rogue Traders Bag $200M in Credit Hysteria
False emails drive down stock of UK mortgage lender
By Jim O'Neill,  Newser User
Posted Mar 20, 2008 7:46 AM CDT
A London office worker keeps an eye on the FTSE 100 Index.   (AP Photo)
camera-icon View 2 more images

(Newser) – The UK's financial regulator is probing whether malicious traders attacked the share price of the country's largest mortgage lender yesterday by spreading rumors it faced a major liquidity crisis. The Telegraph reports that HBOS saw its shares plunge 20% as an email circulated suggesting the firm was facing trouble. The hunt is on for at least one rogue trader who shorted HBOS and made $200 million.

Computer safeguards automatically suspended trading when shares began to slide, and both HBOS and the Bank of England had to deny rumors of liquidity issues. The lender's share price recovered but was down 7% by day's end, leading losses across the FTSE. A senior executive at the lender called it "the modern day version of bank robbery."