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Rogue Traders Bag $200M in Credit Hysteria

Posted Mar 20, 08 7:46 AM CDT in Crime & Courts,  Business 

(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."

Sources Daily Telegraph (UK), Guardian (UK)

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A London office worker keeps an eye on the FTSE 100 Index.   (AP Photo)
HBOS was the target of liquidity rumors that drove its share price down some 20% yesterday on the London Stock Exchange.   (Getty Images)
A man walks past a logo outside the London Stock Exchange. HBOS shares slid 7% yesterday aftertrading off 20%   (AP Photo/Matt Dunham)
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Financial Crisis • Great Britain • credit crisis • Bank of England • Northern Rock • HBOS • London Stock Exchange


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