Barclays may ask FSA to investigate false market rumors - report
UK bank Barclays is considering asking the Financial Services Authority to launch an inquiry into false rumors possibly spread by traders looking to profit from falling share values, according to a report in the press.
Naguib Kheraj, the finance director of Barclays, told The Times that Barclays may ask the FSA to investigate possible short-selling after rumors of losses on the commodity markets caused the company's stock to fall. He said that he had heard false rumors that Barclays Capital had lost GBP400 million in one case and GBP600 million in another. Barclays shares fell from GBP6.9 at the start of the month to less than GBP6 at their low point last week. Mr Kheraj told the newspaper: I've had many people calling me, saying: 'We've heard this, is it true?'. In a volatile market, these rumors gain currency. Short-selling is a way of profiting on falling stocks, by borrowing shares, selling them, then buying them back when the price drops. UK furniture retailer MFI was also hit by false market rumors last February and an FSA investigation into possible market abuse is thought to be continuing.
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