A group of Lloyds shareholders have lost a multi-million-pound action against the bank over its purchase of rival HBOS in 2009.
The 5,803 former Lloyds TSB shareholders claim they were "mugged" when the bank took over HBOS, which was laden with bad mortgages.
Lloyds was forced to accept a £20bn state bailout and the government continued to own a stake until 2017.
Lloyds said it welcomed the decision as the best for shareholders as a whole.
Damon Parker, founder and partner of law firm Harcus Parker, who represents 300 institutions as well as individual shareholders in the case, said: "Our clients are deeply disappointed by today's judgment,
"They wish to assess their options and will be considering whether to appeal."
During the hearing, the judge heard arguments that directors had recommended the "disastrous" acquisition when, based on information they had, no reasonable director would have done so.
The judge was told Lloyds directors failed to disclose the following facts:
- HBOS had received a covert loan from the Bank of England - known as "Emergency Liquidity Assistance" - totalling £25.65bn
- After announcing the intended acquisition, Lloyds had secretly loaned HBOS a further £10bn
- HBOS had also received covert financial support from the US Federal Reserve, then totalling $14.5bn (£11bn)
But lawyers for Lloyds argued that the case was "entirely devoid of merit", and "fundamentally flawed at every level".
A Lloyds Banking Group spokeswoman said: "The group welcomes the court's decision. Throughout this process, the group has sought to act in the interests of our shareholders as a whole."