Lloyds bosses sued over its HBOS move

Lloyds’ former chairman Sir Victor Blank and former chief executive Eric Daniels have been named in a suit lodged with the Southern District of New York court.

The board is accused of making misleading statements about the quality of the HBOS transaction announced in 2008 – shortly after which Lloyds had to be bailed out by the Government.

The court action comes as pressure intensifies for a report into the collapse of HBOS to be published by the Financial Services Authority (FSA). Sir Victor and Mr Daniels are accused of violating parts of the US Exchange Act, it has been reported, with the action alleging that “wrongful conduct” led to “false and/or misleading statements” being issued.

The claim is being brought by solicitors on behalf of Albert Ross of Louisiana but it is understood that a British shareholder group, Lloyds Action Now, is in separate talks to bring its own claim.

HBOS was receiving emergency funds from the Bank of England within weeks of it being taken over by Lloyds, while its bad debts are still being unwound, and the final bill could exceed £60 billion.

The FSA has been exploring its collapse for the last three years, in particular its corporate lending arm, which bankrolled the acquisition of numerous hotel groups and housebuilders.