Hedge fund reveals big short position in HBOS

A US hedge fund on Monday revealed a short position of more than 3 per cent in the outstanding shares in HBOS, the mortgage lender undertaking a rights issue, as new rules on disclosure came into force.

Harbinger Capital Partners made the disclosure of its 3.29 per cent short position as part of the Financial Services Authority’s crackdown on suspected abuse by short sellers of companies in rights issues to raise new capital.

Under the new rules it was also revealed that GLG Partners, a London-based hedge fund, had amassed a short position of 4.14 per cent through its various funds in Bradford & Bingley, the UK mortgage lender, that earlier this month was forced to reprice its rights issue.