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HBOS accused of misleading the public over £4bn rescue
At the height of the crash, the bank failed to tell investors it was being supported by the state
A highly questionable deal between a major British bank, the previous Labour government and UK financial regulators resulted in the publication of misleading information that led the public to invest hundreds of millions of pounds in the failing bank.
An investigation by The Independent on Sunday has found the Treasury and the Bank of England were funnelling billions of pounds worth of loans to HBOS (Bank of Scotland) when it raised £4bn – without informing potential investors that it was surviving on life support from the state.
In a desperate attempt to keep its head above water at the height of the financial crash, the bank issued a £4bn rights issue, where new shares were issued to investors, in April 2008. This outlined its financial position in a prospectus signed off by UK financial regulators.
Source: http://philosophers-stone.co.uk/wordpress/2014/09/hbos-accused-of-misleading-the-public-over-4bn-rescue/
