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Former head of Project Rosetta to review GRG claims  May 9, 2016

As the Financial Conduct Authority’s report into RBS’s Global Restructuring Group (GRG) nears completion, RBS has appointed a familiar face to head up their response.  In 2014, the Financial Conduct Authority (FCA) commissioned Promontory Financial Group, a consultancy company that specialises in regulatory compliance, and Mazars, an accountancy firm, to carry out an independent review to review the GRG Group after it was accused of fleecing assets from ‘distressed’ businesses.

Such accusations initially formed the basis of the 2013 Tomlinson Report by Lawrence Tomlinson during his tenure as the Serial Entrepreneur in Residence at the Department for Business, Innovation and Skills.  The Tomlinson Report, which provided evidence of RBS artificially creating defaults to allow them to seize business assets, was refuted by RBS in a counter report.  It is hoped that the FCA report will uncover the truth.

After multiple delays and missed deadlines, the FCA have confirmed that it has received a draft report which has been sent to the RBS for review and any final comments they need to make.  Whilst the FCA has yet to comment on when the report will be published, a spokesperson has advised that they are in the “latter stages” of their work.

In the meantime, RBS have appointed Mark Spurin to head up the internal team which will be tasked with formulating the Bank’s response following the eventual publication. Mr Spurin is the former Head of Project Rosetta, the code name for RBS’s internal team who dealt with the FCA mandated review into the sale of interest rate hedging products (IRHP).

Mr Spurin’s appointment will come as a mixed blessing for victims of the GRG.  A group of over 400 business owners had been preparing to sue the RBS in the High Court for over £800 million. A spokesman for the group, the RBS/GRG Business Action Group, confirmed that they were hopeful that the FCA report will recommend the setting up of a compensation scheme.  

Mr Spurin’s appointment will lead to hope that some kind of engagement with the victims will follow the report.  However such hope may be tapered due to perceived failings in Project Rosetta’s handling of the IRHP review.

Project Rosetta has been criticised for failing to properly compensate customers who had their livelihoods destroyed by the mis-selling of IRHPs.  RBS were accused of trying to minimise compensation pay-outs according to whistle-blowers, this included seeking to provide alternate IRHP in cases in which other Banks would likely provide full compensation. This has led to fears that Mr Spurin’s involvement in any GRG redress scheme could leave some customers similarly short changed.

Whether a formal GRG redress scheme follows the FCA report and the impact of Mr Spurin’s appointment remains to be seen.  However if you were one of the thousands of victims of the GRG you would be wise to monitor the situation in the coming months.

A little bit about what we do here at Seneca Banking…

Seneca Banking Consultants have represented over 1,000 clients with claims for mis-sold complex financial instruments. We have provided evidence before the Treasury Select Committee as part of the inquiry in to SME lending. We are the market leader in this sector and provide expertise from the Banking, Investment and Legal sector.

We are uniquely placed to be able to offer a claims management solution to those who fear they may have been mis-sold a complex IRHP or Currency Swap. We are able to analyse their financial suitability, advise on the grounds for a claim and seek satisfactory redress if needed.