March 25 (Bloomberg) -- HBOS Plc, Britain's biggest mortgage lender, rose as much as 17 percent in London trading, its biggest gain ever, after the company's executives bought shares in the bank.

HBOS added as much as 80.25 pence to 554 pence, the most since the Edinburgh-based company's stock began trading in September 2001. The shares gained 12 percent to 529.5 pence as of 9:18 a.m.

Chief Executive Officer Andy Hornby and other employees bought a total of 1.4 million shares on March 20, the bank disclosed yesterday. U.K. regulators said March 19 they are investigating ``false rumors'' on stocks after HBOS dropped last week to 446.25 pence, the lowest ever, on speculation the bank had funding difficulties. The bank denied it had any such difficulties.

HBOS will pass its own report to the U.K.'s Financial Services Authority on ``everything that we know'' about the events of March 19, said spokesman Shane O'Riordain today in a telephone interview. The bank is also ``looking at the possibility of some external help on an informal basis,'' he added.

HBOS approached Richard Wyatt, founder of Schroders Securities' U.K. equities business and former chairman of Panmure Capital, to help with its investigation, the Financial Times reported earlier.

The Bank of England March 22 said it's in discussions with other central banks to ``ease the strains'' in financial markets.

``Liquidity problems are fading away'' and interbank lending may become less expensive although concern about the value of banks' assets remains, said Mamoun Tazi, an analyst at MF Global Securities Ltd. in London. ``We are not out of the woods yet,'' he said.

To contact the reporter on this story: Jon Menon on jmenon1@bloomberg.net

Last Updated: March 25, 2008 05:39 EDT