Investors target City regulator over handling of 2008 bank collapse
Campaigners fighting on behalf of almost one million Bradford & Bingley investors have fixed their sights on the City regulator.
The Bradford and Bingley Action Group (BBAG) has lodged a Freedom of Information request with the new Financial Conduct Authority (FCA) to see whether its predecessor – the Financial Services Authority (FSA) – withheld information from shareholders in the lead up to the bank's collapse in 2008.
Bradford & Bingley, best known for its bowler hat logo, was heavily exposed to the troubled buy-to-let mortgage market in the lead-up to the financial crisis. The lender ran into difficulties when funding from the wholesale money markets dried up.
The BBAG has since been fighting for compensation for shareholders who incurred average losses of between £800 and £1,000 each. Many of the investors received shares as part of the bank's demutualisation in 2000. The investor group alleges the officers from the FSA were "reassuring members of the public about the financial viability of the company" in the week leading to its nationalisation, a decision overseen by former Prime Minister Gordon Brown and his Chancellor, Alistair Darling. By doing so, they claim shareholders were misled about the bank's true financial health.
An FCA spokesman said: "The FCA is unable to comment as it has only recently received a request, which it is considering."
The BBAG is also fighting with the Information Commissioner's Office for access to official documents. A decision on this is expected soon.
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