Market abuse claims tough to prove

Short-selling - betting a share will fall - is not against the law, and is a common activity by investors from big pension funds down. Sometimes they use it to hedge against a large position in a company, sometimes as a bet the whole market will fall.

The FSA's market abuse directive lists seven types of illegal behaviour. The key one here is No06 - dissemination, or "giving out information that conveys a false or misleading impression about an investment where the person doing this knows the information to be false".

But those betting that banks are in trouble and their shares are overvalued can surely argue that this seemed a reasonable assumption.