UK regulators to launch Co-op Bank enforcement action-source

LONDON Mon Jan 6, 2014 9:01am EST

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LONDON Jan 6 (Reuters) - Britain's financial regulators will start enforcement action against the Co-operative Bank to determine if it misled investors over its financial health, a source familiar with the matter told Reuters on Monday.

The Financial Conduct Authority and the Prudential Regulation Authority have been assessing whether the bank should be investigated since November, according to sources familiar with the matter.

Co-op Bank fell under the control of investors including U.S. hedge funds after a 1.5 billion pound ($2.5 billion)capital shortfall was exposed. Its problems were exacerbated when former chairman Paul Flowers was arrested as part of an investigation into the supply of illegal drugs.

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