Money News
City watchdog, the Financial Services Authority (FSA), has confirmed it has launched an inquiry into potential stockmarket abuse.
The inquiry comes after claims that investors short-selling the market have benefitted from share price falls caused by the spreading of unsubstantiated rumours.
Earlier in the day HBOS was forced to deny it was seeking emergency funding from the Bank of England.
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.
She added that the regulator won't 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," she added.
19 March 2008 © Moneyextra.com
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