RBS Said to Face $16 Million Fine Over Coutts Bond Fund Sales
Royal Bank of Scotland Group Plc (RBS)’s Coutts & Co. unit will be fined less than 10 million pounds ($16 million) after failing to warn clients about the risks of investing in a bond fund overseen by American International Group Inc., according to a person with knowledge of the talks.
The Financial Services Authority, the U.K.’s finance regulator, may announce the fine as soon as tomorrow, said the person, who declined to be identified because they weren’t authorized to speak on the matter.
The FSA opened a probe last year into the sale of the ALICO Premier Access Bond Enhanced Variable Rate Fund to Coutts customers between 2003 and 2008. AIG’s assets were frozen when the U.S. government bailed out the insurer in 2008, locking up Coutts clients’ money.
RBS, which is based in Edinburgh, has said previously it was cooperating with the regulator’s investigation of how the bank marketed the fund sold by the insurer. Spokesmen for the FSA and Coutts declined to comment. The fine was reported earlier by Sky News.
To contact the editor responsible for this story: Anthony Aarons at email@example.com.