NEW YORK (TheStreet) -- Lloyds Banking Group PLC (LYG) and five of its former executives are being sued by a group of investors who allege they were misled regarding the company's financial position, Reuters reports.
The investors claim Lloyds breached its fiduciary responsibilities with regard to the 2008 purchase of the banking and insurance company HBSO PLC.
The investors suggest the 2008 deal removed almost $10 billion, or 6 billion pounds, from the total value of the bank's shares. Investors also say they were never told HBOS was receiving emergency aid from the Bank of England and the U.S. Federal Reserve, Reuters added.
"The group's position remains that we do not consider there to be any legal basis to these claims and we will robustly contest this legal action," the U.K.'s largest retail bank told Reuters.
Lloyds stock was up slightly, 0.4% to $5.05, in afternoon trading despite news of the lawsuit.
Separately, TheStreet Ratings team rates LLOYDS BANKING GROUP PLC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LLOYDS BANKING GROUP PLC (LYG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity."