Deadline looms for investors wishing to join action against RBS Group
April 2nd, 2014 (minor edits to 4th paragraph and new headline, April 22nd, 2014)
Investors wishing to join the class action lawsuits against the Royal Bank of Scotland over its “misleading” April 2008 rights issue have until Thursday, 15 May 2014 to decide whether to proceed.
The cut-off point was laid down by the judge in the case, Mr Justice Hildyard as part of a group litigation order (see Hildyard’s judgment of 12 February).
With 12,500 members including ex-RBS and NatWest staff, retail investors and institutional investors, the RBOS Shareholders Action Group maintains that RBS and four of its former directors — Fred Goodwin, Sir Tom McKillop, Johnny Cameron, and Guy Whittaker — misrepresented its financial position in April 2008 by omitting key facts from the rights issue prospectus.
The investors argue that the bank withheld critical facts about the perilousness of its own financial position and its true reasons for holding a rights issue from them. This differed from the bank’s rather more open approach a small clique of “insiders”, said to have included the asset management groups Standard Life Investments, Legal & General Investment Management and the Universities Superannuation Scheme, to whom the bank is said to have been marginally more honest. The action group, represented by solicitors Bird & Bird, claims that RBS is liable to make good their losses as a result of alleged breaches of Section 90 of the Financial Services & Markets Act 2000.
Last week the RBoS Shareholders Action Group, secured after-the-event (ATE) insurance and indemnity cover to enable it to proceed with its £4 billion legal claim against the bank. The £23.5 million insurance cover will protect members of the group against the consequences of an adverse ruling. RBS has said it will “vigorously” oppose the claim.
The action group’s legal team is in the process of preparing a detailed reply to the RBS defence. The case, in which Stewarts Law is representing another group of institutional investors, continues. The next case management conference fixed for 23 May 2014, at which procedural directions up to the trial are expected to be made.
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