City traders making money from market manipulation
Back on January 16th in my blog, I questioned whether BDO Stoy Hayward were right when they said the credit crunch was likely to cause an increase in fraud. How many usually decent and law abiding business people would be driven through desperation to become felons?
Yesterday, the turmoil in the stock market caused by malicious rumours in the city caused HBOS share values to fall by nearly 20% at one point. Were these rumours driven by fear or plain greed? Others are saying that the rumours may have been started by someone purposely setting out to make a fast buck to make up for significant losses in recent months suffered by hedge funds and others. Short selling is quite legal of course but market manipulation is a criminal offence because it is a type of fraud. It will be interesting to see if the FSA will ever find out who started the rumours and why.
Another commentator said on the radio this morning " When the going gets tough, the fraudsters get going". Maybe BDO Stoy Hayward are right!