Deliberately spreading false information in order to profit from the movement in a share price is a crime in most developed countries. The trouble is that – with the exception of blatant lies spread by spam e-mailers in their efforts to hype a stock price – it is hard to detect and even harder to prove. False rumours are a fact of life for tra-ders. But in today’s febrile, fragile markets they are uniquely effective and uniquely damaging. Regulators should respond with a greater effort to catch those responsible.

On Wednesday morning shares in HBOS, a large British bank, fell by 17 per cent because of rumours it was short of cash. The shares recovered, but the UK’s Financial Services Authority still denounced “a series of completely unfounded rumours about UK financial institutions ... sometimes accompanied by short-selling”. The FSA has launched an investigation. The US Securities and Exchange Commission has launched a similar inquiry into rumours that undermined Lehman Brothers shares.