The Royal Bank of Scotland to be sued for fraud by Ian Hamilton QC in the small claims court
Ian Hamilton, an 83-year-old motorbike riding QC alleges that the bank fraudulently misrepresented its financial position at the time of its rights issue last year. The action will be watched with interest by thousands of other investors who also believe that they were conned into investing in the Edinburgh-based bank’s rights issue.
The rights issue was formally announced by RBS on April 22nd, 2008 with investors being invited to subscribe to new stock at £2 a share. Investors were invited to purchase 11 new shares for every 18 shares they already owned. Even though experts were already well aware of concerns about the bank’s financial strength, the rights issue was nearly fully subscribed and was completed on June 6th.
Investors who participated have good reason to feel cheated. Four months later, in mid-October 2008, the bank had to be rescued from near-insolvency by the UK government, which injected a further £20bn of capital to shore up its finances. RBS shares are today trading at 34p a share, so they have lost 83% of their value since the rights issue.
Ian Hamilton has astutely raised his action against RBS at Oban Sheriff Court. He alleges that the bank fraudulently misrepresented its solvency position when he bought 640 shares at £2 a share.
He plans to call past and present RBS directors, including the former chief executive Sir Fred Goodwin, as witnesses.
In Hamilton alleges in his court claim that RBS induced him to invest his money “by concealing the true state of their finances”. Alternatively, he alleges the bank was “negligent in representing themselves as solvent at all material times when in fact they were insolvent”.
A successful outcome for Ian Hamilton could lead to thousands of shareholders who also took up their rights to new stock at £2 a share taking similar action – with massive potential repercussions.
Argyll and Bute Liberal Democrat MP Alan Reid told the Aberdeen Press & Journal: “This case could have very serious ramifications. If Mr Ian Hamilton is successful, RBS would have to pay out millions of pounds to investors. Since the UK Government has a majority stake in the bank, the taxpayer would end up picking up the bill.”
Ian Hamilton told the P&J: “What I am hoping is that big people will take up my case and run with it.
Hamilton added that directors should have known the state the bank was in, adding: “Had I borrowed £1,282 from RBS by fraud or without disclosing that I was very nearly broke or broke, they would be suing me for the money and I see no reason why I shouldn’t sue them.
“In order to pursue my case it will be necessary for me to call witnesses to establish the position when I invested this money.”
“It is my intention to call the directors of RBS themselves to Oban Sheriff Court. People forget the power of the law of Scotland to protect tiny individuals like myself against the great and the mighty.
“Someone should take them to account and if no one else will do it, I’m going to have a crack at it.”
A spokesman for the bank said last night: “We are aware of this action and will defend it vigorously.”
Ian Hamilton gained fame as one of four nationalist students who seized the Stone of Scone from Westminster Abbey in a daring raid on Christmas Day 58 years ago and brought it back to Scotland. He has a blog at www.ianhamiltonqc.com.wordpress/
I wish Mr Hamilton all the luck in the world and he’ll need it! The quote from the Lib Dem MP sort of says it all:
“Argyll and Bute Liberal Democrat MP Alan Reid told the Aberdeen Press & Journal: “This case could have very serious ramifications. If Mr Hamilton is successful, RBS would have to pay out millions of pounds to investors. Since the UK Government has a majority stake in the bank, the taxpayer would end up picking up the bill.”
I think it’s called ‘flood gates’ and sadly, even the most respected of Judges seem to run a mile from it. With the excuse that the ‘tax payer’ will be damaged by the truth, it’s better to bury it.
I think the same ‘floodgate’ theory also stopped any real truths coming out in the Court of Session’s case last week about the Lloyds/HBOS merger. In that one, I understand the issue of a ‘secret dossier’ compiled by the Tripartite Authority about the real state of HBOS’s liquidity was buried and that the QC for HBOS even went as far as to say that all copies had been destroyed!
Why? What is so secret that HBOS’s hareholders and savers have no right to see it? What dark secrets in HBOS are so bad they have to destroy the evidence? And again, with this morning’s announcement, a similar scam is being used to bury all the ‘toxic debts’ of the banks.
We shouldn’t be fooled into believing the taxpayer, despite being the banks’ biggest shareholder now, has any more hope of protection from the banks or, as Mr Brown has promised ‘more transparency’.
It looks to me that the Government is hell bent in assisting in the cover-up of the biggest cover up of financial scandal in our country’s history. It would be poetic justice if an 83-year-old man and a rebel from the 1950s turned out to be the ‘David’ that this ‘Goliath’ is so dreading.
I will watch Mr Hamilton’s case with interest and I really hope he is successful. Maybe he will open the door to other scandalous fraud by Banks being exposed – like the £500m+ lost by one Reading office of BoS – or is that just another example of dead debt buried under a huge toxic Mound now?
Good luck Mr Hamilton, I hope the Scottish Justice system will do you proud.
I hope that Mr Hamilton will contact me, as I would like to join his efforts. My RBS shares were bequeathed and I can take the brunt more than my 90-year-old Aunt could have done. These people should not be able to just walk away from this mess.
I have subscribed to Mr Hamilton’s blog
it is time for an action group of small shareholders
I would also like Mr Hamilton to contact me, as I have other information which can directly help his case. There is a ‘wheel of corruption’ within our current government, which is growing like a cancer. I have discovered, after five long years of intense private investigation into a massive HBOS/FSA fraud, that the governments in UK and USA were behind the whole Mini-Madoff Ponzi scheme, where is a ‘rigged loop’ between all those in power, the banking cartel whom the government ‘answers’ to, the “complaints System” and all those unaccountables who pass the buck, the FSA and the SFO who back the FSA. If you can learn to ‘walk through walls’ (as I am learning to do, fast), it is possible to ‘blow the whistle’ on the core of the problem, as Paul Moore has begun to do: exposing the flawed monetary system for what it is, exposing the IMF and banking cartel (behind the RBS shares scandal, massive swindles happening in all kinds of disguises, systemic fraud happening with the entire banking group especially HBOS, and so on..)
One of the most shocking things I discovered recently is that the Bank of England was privatised in the late 1970’s (Companies House No: 1307478 – so is this WHY, on the 6th April 1977 the Bank of England formed the BANK OF ENGLAND NOMINEES LIMITED, (BOEN), a wholly-owned subsidiary private limited company, no: 1307478, with two of its 100 £1 shares issued and its Memorandum & Articles of Association’s Objectives being:-
“To act as nominee or agent or attorney either solely or jointly with others, for any person or persons, partnership, company, corporation, government, state, organisation, sovereign, province, authority, or public body, or any group or association of them….”
In addition: Her Majesty’s Court Service, (HMCS), is the employer of judges and court staff as part of the ‘Executive’. Now the same ‘Executive’ own 43% of Lloyds/HBOS (and other banks), therefore, no court/judge can rule against a citizen for a debt of a bank which the Executive has an investment in without potential ‘bias’, ergo; Nemo judex in re sua [No man can be judge in his own cause.]
Watch Freddie Forsyth’s take on banks:
http://news.bbc.co.uk/1/hi/programmes/the_daily_politics/
This sums things up nicely: “There is, however, a limit at which forbearance ceases to be a virtue. People crushed by law, have no hopes but from power. If laws are their enemies, they will be enemies to laws; and those who have much to hope and nothing to lose, will always be dangerous. Bad laws are the worst sort of tyranny. Whenever a separation is made between liberty and justice, neither, in my opinion, is safe. Neither the few nor the many have a right to act merely by their will, in any matter connected with duty, trust, engagement, or obligation. When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle. All who have ever written on government are unanimous, that among a people generally corrupt, liberty cannot long exist.” Edmund Burke
“The only thing necessary for the triumph of evil is that good men stand by and do nothing” – Edmund Burke
Below is my letter sent today to Keith Davis, the person responsible for “money laundering policy” within the Treasury’s “Financial Crime Unit”, which is ‘right on the money’ I hope you will agree:-
Keith Davis
Treasury
Dear Mr Davis
It’s quite clear that this is a complete ‘stitch up’ within government.
It should also be quite clear from my explanations that we have been blocked by the FSA and all others in a position to correct matters, hence turning to the Treasury. If you are a “policy adviser” yet have “no teeth” to do anything about the policies in place, what purpose can be served? You inaction is allowing this ‘putrid rot’ to continue, unchecked. The People feel that it is the whole Banking Cartel and Treasury that should be investigated – especially given that you have concealed from the People, the privatisation of the Bank of England in the late 1970s!
You are making a mockery out of Justice and integrity. This ‘arms length’ approach within government Departments is like a cancer and needs a whole re-think. The Public should not be having to jump through hoops like this, nor having to tolerate being victimised in this manner by the establishment and by the highly corrupt and flawed, banking system. Are you able (or willing) to understand that the entire banking system is a ‘black hole’ that is fraudulent because it issues money as “debt”, backed by nothing?
Until you address this fundamental ‘scourge of the people’ and thief of civil liberties, you are as one beating the air, and effectively, stealing from the public and the taxpayer. No amount of “bail outs” will solve a thing, because debt cannot bail out debt! It doesn’t take a genius to figure this out. Yet the Treasury and those in government don’t seem to have even an elementary understanding of basic economics. This usury is the root cause of all the suffering of the citizens of the world. Face it !
It is highly significant that there were 23 “banks” involved in the government-organised theft of the quarter billion dollars of innocent people’s money in the ‘Vavasseur/EML’ case – STOLEN by systemic fraud and money-laundering. And with people like you in charge of “money laundering policy”, steeped in your indifference and dissociation from the effects of your actions, it is an utter disgrace – and we believe you should be routed out of office and replaced with someone with honesty and integrity and a conscience.
I do not accept that you are “not able to be any further help”. If the willingness and conscience were present, even in a small degree, you would be doing something about this before it turns ‘full circle’ and comes back to bite even you – which is where this is all heading. At this rate, you will have anarchy and the Treasury will have to be disbanded.
Even Einstein counsels “the definition of insanity is doing the same thing, over and over again, but expecting a different result. You cannot solve the problem with the mindset that created it”. Are you and your colleagues willing to change your mindset, for eveyrone’s sake? We will continue to press these issues and do whatever it takes to clean this all up.
Liz Watson
I wish him the best of luck too.
I do wonder how he has even managed to get access to Small Claims Court though – I have not been able to! Although, supposedly, it is ‘officially’ accesible to anyone.
Hope he will contact me to! I could do with chatting to a QC.
Try searching my name if interested…
brotherjacob at yahoo dot com
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my God, i thought you were going to chip in with some decisive insght at the end there, not leave it