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03/04/2013
Investors Submit £3.5bn RBS Compensation Claim
Thousands of investors have launched a joint compensation claim against the Royal Bank of Scotland.
The claim is for more than £3.5bn.
The group claims the bank deliberately misled its shareholders into believing it was in good financial health, just before the organisation collapsed in 2008.
It is understood more than 12,000 private shareholders as well as 100 institutional investors have raised a class action against the bank.
They are also suing former RBS executives, including ex-Chief Executive, Fred Goodwin, and former chairman Sir Tom McKillop. They were senior figures at the bank in 2008.
The institutions involved in the class action are understood to include 20 charities as well as churches, pension funds, hedge funds, fund managers and private client brokers. Collectively, they manage in excess of £200bn.
In a statement, the investors said: "The action group maintains that the bank's directors sought to mislead shareholders by misrepresenting the underlying strength of the bank and omitting critical information from the 2008 rights issue prospectus.
"This means that RBS will be liable for the losses incurred on shares subscribed in the rights issue, by reason of breaches of Section 90 of the Financial Services and Markets Act 2000."
The action group estimated that the final claim may be as much as £4bn.
The bank has 30 days to respond to the claim.
RBS was saved from collapse in 2008 by a UK government bailout and is now 82% owned by the taxpayer.
(JP/CD)
The claim is for more than £3.5bn.
The group claims the bank deliberately misled its shareholders into believing it was in good financial health, just before the organisation collapsed in 2008.
It is understood more than 12,000 private shareholders as well as 100 institutional investors have raised a class action against the bank.
They are also suing former RBS executives, including ex-Chief Executive, Fred Goodwin, and former chairman Sir Tom McKillop. They were senior figures at the bank in 2008.
The institutions involved in the class action are understood to include 20 charities as well as churches, pension funds, hedge funds, fund managers and private client brokers. Collectively, they manage in excess of £200bn.
In a statement, the investors said: "The action group maintains that the bank's directors sought to mislead shareholders by misrepresenting the underlying strength of the bank and omitting critical information from the 2008 rights issue prospectus.
"This means that RBS will be liable for the losses incurred on shares subscribed in the rights issue, by reason of breaches of Section 90 of the Financial Services and Markets Act 2000."
The action group estimated that the final claim may be as much as £4bn.
The bank has 30 days to respond to the claim.
RBS was saved from collapse in 2008 by a UK government bailout and is now 82% owned by the taxpayer.
(JP/CD)
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