RBS shareholders plan £9bn legal action

by Gill Montia

Story link: RBS shareholders plan £9bn legal action

Royal Bank of Scotland (RBS) shareholders are preparing to sue former directors of the group.

The bank is currently 73% state owned, following is near collapse a year ago, and investors are looking for up to £9 billion in compensation, claiming that they were misled by RBS’s former chief executive, Sir Fred Goodwin, and other board members.

Spokesman for the RBS Shareholders’ Group, Roger Lawson, has warned: “All the directors on the board at the time of the buyout will be targeted by this action.”

Matters centre on the £12 billion rights issue undertaken by RBS six months before its demise.

The fundraising has already been called “the biggest crime in financial history in the UK” by Michael Lamoureux, who runs another action group for RBS shareholders.

According to reports, the Financial Services Authority is already examining the role of former RBS board directors in relation to the rights issue, to establish whether the stock market was kept properly informed about the bank’s financial position in the run up to the fundraising.

Meanwhile, a class action is being brought in the US by local authority shareholders in Merseyside and North Yorkshire, with the entire RBS board at the time of its demise named in the law suit.