Investors to bring £4 billion lawsuit against RBS
19 October 2012
RBS and its former boss Fred Goodwin would be hit by a £4 billion lawsuit by investors following their securing insurance against the cost of losing the case.
With the ''safety net'' in place investors hope to take the case to court next year, which could end up putting Goodwin, former chairman Sir Tom McKillop and former investment banking chief Johnny Cameron in the dock.
The trio is supposed to have been extended indemnity against such lawsuits, but this protection could be worthless if they were found to have breached their contracts.
The RBS Shareholders Action Group has successfully raised roughly £20 million from litigation funds and insurance companies to place a bond with the court to cover RBS' legal costs in the event of the failure of the case.
The group, comprising 100 institutions and 12,000 individuals, would now likely file a writ before Christmas alleging that directors misled them into taking part in its £12 billion rights issue in 2008.
Meanwhile, the UK financial regulator was criticised by MPs for its failings over RBS' damaging takeover of part of Dutch bank ABN Amro in 2007.