There is no doubt that false and damaging rumours were circulating about HBOS on 19 March 2008 and these would have had some impact on HBOS’ share price. It is difficult, however, to say how much impact, as the share price was also affected by the interaction of a number of other complex factors on the day, including:
A lack of liquidity in the order book with parties unwilling to enter buy or sell orders, particularly after the automated trading halt; and
The effect of algorithmic trading strategies, which amplified the impact of the initial downward trend in the HBOS share price.
Despite the likelihood that the rumours contributed to the fall in the share price, the FSA has not uncovered evidence that they were spread as part of a concerted attempt by individuals to profit by manipulating the share price.
Full FSA statement is here.