The Financial Services Authority is investigating potential insider trading in Bradford & Bingley stock in the days leading up to the buy-to-let lender’s shock profits warning.
B&B shares fell 8.5% in late trading on Thursday, before rallying a little, and 7.5% again at the end of play on Friday. At the time, the board was holding emergency talks to bail out the bank with private equity firm Texas Pacific Group. Bankers said the collapse ahead of Monday’s announcement suggested possible insider trading.
The FSA confirmed it was looking into the issue, saying: 'As you’d expect, the FSA does monitor sharp movements in the share prices.' B&B shares slumped 24% to 67p on Monday after its profits warning, TPG’s £179m cash injection for a 23% stake, and the overhaul of its original 82p-a-share rights issue.