FURIOUS Royal Bank of Scotland shareholders yesterday demanded up to £4bn in compensation as they launched a class-action lawsuit against the bank and former directors, including ex-chief executive Fred Goodwin.
Thousands of members of the RBoS Shareholder Action Group claim that the bank tricked investors by misrepresenting the underlying strength of the bank when it made a £12bn rights issue in April 2008, months before it collapsed.
The claimants, who include around 12,000 individuals as well as dozens of large institutions such as Deutsche Bank, claim RBS and its former directors are at fault for omitting crucial details from the 2008 prospectus.
They say the bank failed to admit that it was forced to raise the new capital by the regulators and should have admitted that it was struggling following a disastrous 2007 deal to buy Dutch bank ABN Amro.
In addition to Goodwin they are also suing the now part-nationalised bank itself, former chairman Sir Tom McKillop, ex-investment banking chief Johnny Cameron, and former finance director Guy Whittaker.
One 76-year-old member of the action group from Harrow told City A.M. that the rights offer had “looked attractive but the directors completely mislead us”.
“I ask myself: what went into Fred Goodwin’s head when he did these deals? Until now, he hasn’t had to answer for his sins.”
A 2011 report by the Financial Services Authority criticised executives at the bank but decided against punishing any individuals.
RBS declined to comment.
STEVEN BAKER - BIRD & BIRD
International law firm Bird & Bird is handling the case against Royal Bank of Scotland on behalf of thousands of irate shareholders.
Steven Baker, a partner in the company’s London office, is in charge of the team and has been working on the case since 2010.
Baker took up the case when he was employed by rival law firm Olswang, where he worked for almost a decade, latterly as head of commercial litigation. He brought the work with him when he joined Bird & Bird earlier this year with a brief to expand the international dispute resolution practice group.
Barrister Philip Marshall QC of Serle Court will make the case in court, having been instructed to work on the case way back in January 2010. The Cambridge graduate is a commercial law specialist who specialises in commercial fraud and insolvency work.
At the end of last year he acted for airline Aeroflot as it attempted to enforce a fraud judgement handed down in a Russian court against the recently deceased oligarch Boris Berezovsky.