Royal Bank of Scotland Group Plc was asked by investors suing over losses from a 2008 share sale to disclose details of probes by U.K. and U.S. regulators into its near-collapse and 45.5 billion-pound ($78 billion) bailout.
A group of the investors requested documents and correspondence related to the U.K. Financial Services Authority’s 2011 report on RBS, the watchdog’s risk-assessment visits to the bank from 2007, and a probe by the U.S. Securities and Exchange Commission into the lender’s conduct, according to their documents from a London court hearing today.
The bank is facing “a very large disclosure exercise,” said Andrew Onslow, a lawyer for the investors, who have also asked for three PricewaterhouseCoopers LLP reports into RBS. The FSA was replaced by the Financial Conduct Authority in 2013.
RBS is being sued for as much as 4 billion pounds by at least 36,000 investors in a 2008 share offering that took place before the lender was rescued by the British government. The claimants, who range from small investors with a few hundred pounds worth of stock to large companies including Legal & General Group Plc (LGEN), say RBS and its directors should have warned them about its shaky finances.
“While RBS and its former directors made some business decisions that have been criticized, this does not mean that they misled investors or acted illegally,” the Edinburgh-based bank said in an e-mailed statement.
“We have strong defenses to the claims that are being brought against the group and that is why we intend to defend these vigorously and to protect the interests of our shareholders including U.K. taxpayers,” RBS said.
Judge Robert Hildyard today approved plans to hold two trials in the case, one to decide whether RBS was at fault and a later trial to work out how much it may have to pay in damages.
“The mouthful of a combined trial would be too great,” he said. “It would be beyond chewing over.”
The first trial won’t take place until at least 2015. There are four groups of claimants, each represented by different lawyers, working together in a so-called group action.
Former RBS Chief Executive Officer Fred Goodwin, former chairman Tom McKillop, ex-head of corporate markets Johnny Cameron and former finance director Guy Whittaker are named as defendants in one of the claims.
The cases are: John Greenwood v. Frederick Goodwin & Ors, High Court of Justice, Chancery Division, HC13F01247; Trustees of the Mineworkers’ Pension Scheme Ltd & Ors v. The Royal Bank of Scotland Plc, HC13D01192; Legal and General Assurance Society Limited v. The Royal Bank of Scotland, HC14F01714; Dorothy Kim Lamoureux v. The Royal Bank of Scotland Group Plc (RBS), HC14F01704
To contact the reporter on this story: Kit Chellel in London at email@example.com
To contact the editors responsible for this story: Anthony Aarons at firstname.lastname@example.org Peter Chapman, Jon Menon