Two Groups of Investors File Separate Lawsuits Against RBS
April 1, 2013
Thomas A. Dubbs
In a June 2008 rights issue, the Royal Bank of Scotland Group plc (“RBS”) raised £12 billion from investors in an effort to shore up its capital base as the economy weakened and as its assets, including those it acquired through its disastrous 2007 acquisition of Dutch banking giant ABN Amro, quickly deteriorated in value. Just four months later, in October 2008, RBS needed a Government bailout, and the bank reported a £28 billion net loss for the year. To this day, the bank is still 81% owned by the UK Government.
In late March of this year, a lawsuit was filed in the High Court against RBS on behalf of a group of twentyone institutional investors, thought to include several UK pension schemes, alleging that the bank misled investors about its financial health in the prospectus that it issued to investors in connection with the rights issue.
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