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April 3, 2013

RBS Faces $6 Billion Lawsuit

“Royal Bank of Scotland Group PLC and four of its former executives were sued Wednesday by 12,000 individuals and around 100 institutions alleging that they misled investors about the bank’s financial health during a 2008 share sale.

The RBOS Shareholder Action Group issued proceedings in London’s High Court against the bank, former Chief Executive Fred Goodwin, former Chairman Tom McKillop, former investment banking head Johnny Cameron and former finance director Guy Whittaker.

The shareholder action group, which said its final claim may be as much as £4 billion ($6 billion), alleges 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.”

The group said the £4 billion potential claim figure is based on the bank potentially being found liable for losses incurred on the shares issued.”

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Read full Wall Street Journal article here

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