Stock market manipulators yesterday tried to bring down one of Britainâs biggest banks by spreading false rumours through the City. The Bank of England was forced to issue an unprecedented denial that HBOS was in trouble. The Financial Services Authority (FSA) said that it would pursue traders guilty of âmarket abuseâ by spreading untrue claims that banks were on the brink of collapse. The authorities believe that the fear and uncertainty in financial markets are allowing unscrupulous traders to make multimillion-pound profits by whipping up hysteria about the stability of big banks. Yesterdayâs drama began at about 8.30am when rumours started spreading through Londonâs stock market that HBOS, which owns Halifax, the UKâs biggest mortgage lender, and Bank of Scotland, was about to become another Northern Rock and that it had begged the Bank of England for a multi-billion-pound emergency loan. Within 20 minutes HBOSâs shares had plunged by more than 17 per cent as investors dumped their stakes. An hour later, the Bank of England announced that no bank needed emergency funding, while the FSA issued a statement warning investors to stop spreading false accusations. It is feared that short-sellers â investors who use falling share prices to make money â were deliberately spooking the market in order to profit from plunging stocks in a practice called trash ânâ cash. Rumours that the American investment bank Bear Stearns was short of cash contributed to its near-collapse last week after its lenders were scared into demanding that it repay them immediately. The warning to speculators came as it emerged that the American financial watchdog was investigating similar activity in the trading of shares of Bear Stearns and Lehman Brothers, another US investment bank heavily exposed to risky American mortgage business. http://business.timesonline.co.uk/t...ectors/banking_and_finance/article3587090.ece Trash `n` cash....