More than 27,000 shareholders are suing the Royal Bank of Scotland (RBS) and former bank management over allegations that investors were mis-sold during the banks £12 billion fundraising in the height of the financial crisis.
The claims concern investors who lost money by subscribing for shares as part of the RBoS Rights Issue during 2008.
The capital raising at the heart of the investor claims took place just months before RBS’ £45bn Government bailout. It is believed that directors of the bank acted improperly by omitting critical information from the share Prospectus. This led to thousands of shareholders forking out over inflated prices as they were misled about the bank’s financial health and underlying strength.
The state backed lender has already reached full and final settlements with three shareholder groups. It is not reported how much has been offered by the bank, however, it is understood these groups were pursuing claims totaling £4 billion.
This trio, which account for approximately 77% of the claims by value and each represent institutional investors.
Two further groups, made up of retail investors, did not agree to a settlement.
The bank was aiming to reach a deal with these remaining groups, however, a spokesman for the RBoS Shareholder Action Group said: “We had no option but to reject the inadequate offers and remain committed to seeking justice for our members through the courts.”
The potentially costly trial on liability has been set to begin in May 2017 and it is estimated that investors could be due up to 94.5p in the pound.
This will come as a further disappointment to the bank who, this year, reported its ninth straight annual loss and have already earmarked over £400 million for redress payments in respect of customers who were mistreated in their Global Restructuring Group (“GRG”).
Seneca Banking have previously recovered £2.75 million relating to GRG losses and have also recovered just under £100 million in total compensation for clients.
As GRG experts, Seneca have been long pursuing the release of the FCA’s report and are able to offer full support to customers who have suffered at the hands of GRG. Seneca have been at the forefront of winning compensation for businesses mistreated by the Banks. Seneca are already working with a number of clients who have been affected by GRG.
If you or your business has been affected by the conduct of RBS, and believe you may have a claim in respect of this, please get in touch.