Top executives at HBOS were Tuesday night sitting on a £1.4m paper profit after shares in the UK’s biggest mortgage lender rebounded by 15 per cent – their highest jump in a single day.
The bank’s executive directors and its top 250 senior managers bought about 1.3m shares last Thursday at 446p a share – using their net cash bonuses to buy the shares under the bank’s annual bonus plan.
They will get an “enhancement” to their bonuses if they hold the stock for at least three years.
In addition non-executive directors of HBOS also bought more than 100,000 shares at 446½p. Tuesday night the shares closed up 70¾p at 554½p.
Andy Hornby, chief executive had bought 92,812 shares at 446p on Thursday giving him a potential profit on paper of £100,000. Charles Dunstone, non-executive director of HBOS and co-founder of the Carphone Warehouse, paid 446½p each for 100,000 of the bank’s shares.
The purchases were made after the events of last Wednesday when HBOS was hit by a mass sell off which saw its shares plunge as much as 17 per cent.
The bank was hit by false rumours that it had sought emergency funding from the Bank of England.
HBOS will hand its own detailed account of unusual trading patterns in its shares to the Financial Services Authority to aid its investigation into possible market manipulation.
HBOS is understood to have approached Richard Wyatt, the experienced stockbroker, to help uncover any possible rogue trades.
However it has not yet decided whether to hire him. Mr Wyatt founded Schroders’ Securities and Panmure Capital.