The apparent deliberate circulation of false rumours about HBOS, which caused a temporary slump in the bank’s share price, has caused such concern that Alistair Darling, the chancellor, has proposed a new immunity for whistleblowers who can identify those responsible for market abuse. The Financial Services Authority is said to be conducting an investigation into the rumours and also into reports that a UK hedge fund had a concerted policy of influencing share prices by sowing false allegations in the market.

This speedy response is no doubt welcome to financial institutions. However, there are increasingly sophisticated legal and technical means that a business itself can take to track down those responsible for disseminating false and harmful material about it.

There are many means of spreading false rumours. The internet has been a boon for those who run campaigns of hate and misinformation with the aim of damaging businesses and individuals. Many think they can establish a website and post any material they like on it, hiding behind an ostensible cloak of anonymity. Others may set up e-mail accounts in false names from which to send illicit e-mails in the belief that they will not get caught.

A business has a number of ways to respond. It can seek to engage the regulatory and prosecuting authorities to identify the perpetrators. But the authorities may not prioritise the matter or have the requisite resources or experience. Alternatively, the business may attempt a public relations response, denying the allegations publicly. However, that may succeed only so far unless the source of the allegations is found and shut down. For these reasons, businesses are turning to civil means to identify and stop the culprits.

Most internet activities leave a trace. Each e-mail includes a header that contains technical information about the route by which it was sent and which can identify the sender’s computer. The same is true of postings on discussion forums and social networking websites, where identifying data are often held by site operators. Equally, the service provider that hosts a website may be required by a court order to disclose any details it has about the site owner. The content of e-mails, postings or websites may also give clues as to the identity of the person responsible. Through a mixture of technical and legal means, often taking in various jurisdictions, those responsible might not be as anonymous as they may think.

We recently acted for a business that was subject to a harmful campaign on an anonymous website. The perpetrators thought they would never be found out. But after a careful investigation, proceedings were issued and judgment has now been entered against three individuals and a company and they are having to pay very substantial damages for the libels and harassment.

Another effective option, where an anonymous and unlawful e-mail has been sent, is to obtain an order from the court not only restraining the unknown sender (one no longer needs to know the name of the defendant) from further dissemination of the material in question but also requiring him to come forward and identify himself. Such an order can be posted to the address from which the e-mail was sent: it can be explained to the sender that intensive steps are being taken to track him down and that, if he does not come forward, when he is identified, not only will he face a legal action but he will also be in contempt of court and may face prison. Such an approach can have a salutary effect.

When the guilty party has been properly identified, it is likely that he will quickly settle, giving the appropriate undertakings not to repeat the activity complained of and potentially having to pay a hefty amount in damages and legal costs. This can be as significant a punishment as anything likely to be handed out by a regulator.

In order to pursue rumour mongers in this way, the victim must have a potential civil cause of action against them. Often, there will be a possible claim in libel. In other situations, there may be claims in harassment, copyright infringement, or breach of privacy and confidence. In respect of the HBOS rumours, the bank and its shareholders may also have a claim for damages under the Financial Services and Markets Act.

False and anonymous allegations are an increasing feature of business life. The civil law offers a variety of effective techniques that can lead to the identification of those responsible. Those circulating such allegations do so at considerable personal risk.

The writer is a partner in the media litigation department at Olswang

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