Pension funds launch claim against The Royal Bank of Scotland

Pension funds launch claim against The Royal Bank of Scotland A claim has been started against The Royal Bank of Scotland (RBS) over a rights issue which occurred in 2008.

The bank sold its shares at £2 each, and now the claimants are alleging that whilst the bank’s prospectus portrayed good financial health, the reality was in fact very different.

It has been proposed that if the truth had been presented, sales of the shares would have been “severely impacted”.

The claim is based on section 90 of the Financial Services and Markets Act 2000, which states that the documentation which support these kind of dealings must be accurate and truthful.

In addition, the Act bestows the right to compensation in case of losses.

“The claimants intend to pursue this litigation vigorously”

Stewarts Law are representing all 21 claimants. According to The Telegraph, these include a number of UK and international financial institutions and pension funds, such as the Coal Staff Superannuation Scheme, and the Electricity Pensions Trustees

Clive Zietman, Head of Commercial Litigation at the firm, has stated “unless the matter can be resolved amicably, the claimants intend to pursue this litigation vigorously and through to trial in order to seek appropriate redress from the court.”

Slow signs of recovery

The news comes after reports RBS has the fourth-largest pension deficit in large companies in the UK.

The bank is now considering the steps needed to resume dividend payouts to shareholders, which they have been banned from doing since the financial crisis required bailouts. However, these pension liabilities could affect the decision.

Yet amidst these troubles, there could be light at the end of the tunnel, as the bank announced its first two consecutive quarters of growth since the 2008 crash.

The 81 per cent taxpayer-owned organisation also took a swing into the black from last year’s losses of £1.7 billion, after its disastrous €70 billion acquisition of ABN in 2007.

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