THE Financial Services Authority is believed to have uncovered crucial details of the false rumours which caused the value of Halifax Bank of Scotland shares to plunge 20 per cent in a day.
Emails sent by City traders before HBOS's shares fell dramatically on March 19 have been seen by the watchdog, it was reported over the weekend.
Shares in the lender subsequently bounced back but the extraordinary fall led the authority to launch
an inquiry into whether some traders were profiting from spreading false rumours.
The authority is believed to have found e-mails spread over more than a day and is expected to publish its findings at the end of this month.
The watchdog will also continue its clampdown on insider trading by launching a second criminal prosecution soon. It will follow one earlier this year over insider dealing linked to shares in Motorola.
As part of an attempt to tackle insider dealing, the authority doubled its number of criminal prosecutors working on these cases and last year introduced Sabre, a computer system which attempts to spot unusual patterns of share-trading.
It has also been working on new mergers and acquisitions guidelines.
Last year it carried out several investigations into high-profile deals, such as the purchase of Associated British Ports by a private equity consortium led by Goldman Sachs.
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