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Lloyds investors 'mugged' on HBOS purchase, trial hears



The High Court has heard Shareholders in Lloyds were "mugged" when the bank recommended buying Halifax Bank of Scotland (HBOS) at the height of the financial crisis.
 
The allegation was made by the barrister representing a group of 5,803 former Lloyds TSB shareholders at the start of a trial aimed at recovering more than £550m from the bank.
 
 
Richard Hill QC told Mr Justice Norris: "My clients have suffered catastrophic losses from the acquisition, for which we hold the defendants responsible."


The group, which includes roughly 300 institutional investors such as pension funds, is suing Lloyds Banking Group, former chairman Sir Victor Blank, ex-chief executive Eric Daniels, former chief financial officer Tim Tookey and two other former directors.


The class action suit accuses them of recommending the deal to shareholders when no reasonable director would have done so because they knew HBOS had suffered a funding failure and was on "emergency life support" from the Bank of England and Lloyds itself.


Mr Hill said the circular sent to shareholders deciding how to vote on the acquisition was a "highly misleading" document which misrepresented the key information they needed to assess the deal.


He told the court: "The information that would have disclosed it was a bust failed bank was omitted deliberately.
 
 
"The opposite impression was given.


"So, although it had reached the same situation as Northern Rock, shareholders were not told that."


The £12bn acquisition left Lloyds saddled with toxic assets - announcing £11bn of losses from HBOS in February 2009 after its £20.3bn Government bailout.



SKY     News.


This post first appeared on Quest Times, please read the originial post: here

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Lloyds investors 'mugged' on HBOS purchase, trial hears

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