US investors to sue Lloyds

US shareholders in Lloyds are launching a lawsuit against the bank demanding compensation for its takeover over HBOS.

According to This is Money, US shareholders have launched lawsuits against the bank, former chairman Sir Victor Blank and former chief executive Eric Daniels.

The lawsuit claims that investors were not made aware that the Bank of England offered $25bn of emergency funds and the US Federal Reserve offered $11bn of funds to keep HBOS afloat.

Shareholders claim that this meant they were unaware that HBOS was insolvent at the time of the takeover and were kept in the dark when purchasing American Depository Receipts in Lloyds at the time.

Lloyds shares jumped to 280p following the HBOS deal only to plummet. They currently stand at 26.2p.

Lloyds TSB revealed that it bought HBOS for £12.2bn in September 2008.

According to This is Money, the Lloyds Action Now campaign is now looking at similar action in the UK.

A spokesman for the group Adrian Lithgow said: “’It would be unconscionable if Lloyds were to lose the case and have to pay compensation in the US but not in the UK.

“We also looked long and hard at suing the Treasury but they obtained an indemnity from Lloyds so they cannot be sued for non-disclosure.”