Shares in HBOS jumped a record 15 per cent yesterday, giving the bank's top executives a £1.7 million profit on stock they bought last week.

Shares in the bank rose 71p to 544p, the largest one-day increase since HBOS was created by the merger of Halifax and the Bank of Scotland in 2001. On Wednesday last week rogue traders spread rumours about HBOS that sent the shares plummeting by 17 per cent to 398p, wiping more than £3billion off the bank's value.

The Bank of England was forced to deny speculation that HBOS had sought emergency funding to prevent a run on the bank, while the Financial Services Authority threatened to investigate the source of the rumours that had spooked the market.

The following day, Andy Hornby, HBOS's chief executive, along with other executive and non-executive directors and 250 of the bank's senior managers, snapped up about 1.3 million shares at about 446p each. They had put in a request to buy the shares long before the share price began to plummet. Yesterday's share price rise brought them a £1.7 million combined profit on the investment, including a windfall of more than £100,000 for Mr Hornby.

Sources at the FSA said yesterday that the City regulator would take weeks to complete an investigation into the rogue traders. HBOS is compiling a report on the bank's activities on the day of the share-price plunge, which it plans to submit to the FSA.

HBOS said: “We're pulling together our understanding of what happened and will send that to the regulator and they will use it as they see fit.”

The FSA declined to comment on individual shares, but said that there were likely to be three strands to the watchdog's investigation, which will go back as far as March 12. The regulator will use Sabre, a monitoring tool, to look at trades in bank stocks. Up to 20 analysts from the FSA's market monitoring division will examine the findings for unusual trades. Finally, the regulator will interview banks and individual traders. There are suspicions that rumours were started by traders specialising in short-selling to help to force the share price down.

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