The Financial Services Authority (FSA) says "false and damaging ramous" about HBOS funding difficulties were not spread to intentionally manipulate share prices.
An investigation was launched on March 19th, following a sharp fall in the
bank's share price the day before.
Rumours were circulating at the time that a bank was to be bailed out by the Bank of England.
But the
banking and finance regulator has ruled they were not created as part of an effort by individuals to impact share price.
"There is no doubt that false and damaging rumours were circulating about HBOS on March 19th and these would have had some impact on HBOS's share price," the FSA said.
"It is difficult, however, to say how much impact, as the share price was also affected by the interaction of a number of other complex factors on the day."
HBOS was established in September 2001 from the merger of Halifax and Bank of Scotland.
It now has around 23 million retail customers and is the largest savings and mortgage provider in the UK.
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