RBS warns a lawsuit against the bank would cost the taxpayer as it files defence against shareholders £4bn claim

By Rob Davies

PUBLISHED: 17:30 EST, 13 December 2013 | UPDATED: 17:30 EST, 13 December 2013

Royal Bank of Scotland last night warned that a lawsuit against the bank and former boss Fred Goodwin would cost taxpayers money, as it filed its defence against the £4billion claim by shareholders.

The RBS Shareholder Action Group claims the 82 per cent state-owned lender’s £12billion rights issue prospectus in 2008 was billed as a cautious exercise in strengthening the balance sheet.

Acting for around 100 institutions and 10,000 private shareholders, the group says the bank knew the cash call was actually an emergency measure to stave off outright collapse.

Forced to give cash: RBS warns that a lawsuit against the bank and former boss Fred Goodwin would cost the taxpayer money

Forced to give cash: RBS warns that a lawsuit against the bank and former boss Fred Goodwin would cost the taxpayer money

The Government was forced to bail out RBS just a few months later, with some £45billion of taxpayers’ money eventually being pumped into the lender.

RBS (down 1.8p to 315.9p) said directors, including disgraced Fred ‘the Shred’ Goodwin, made ‘some business decisions that have been criticised’ but had not ‘misled investors or acted illegally’.

It said it would defend the case ‘to protect the interests of our shareholders including UK taxpayers’. But the RBS Shareholder Action Group said investors were entitled to seek redress in the belief they had been misled into losing money, regardless of the state’s shareholding in the bank.

 

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‘Had shareholders been given the true picture of the bank’s position, they would have had a better opportunity to assess the risks which caused the shares to collapse and led to billions of pounds of losses for private and institutional shareholders alike,’ said a spokesman.

Prudential, Standard Life, Legal & General and the Universities Superannuation Scheme (USS), are considering whether to join the suit.

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Everyone who has an account with this bank needs to switch .It needs to go bust .

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Great idea. So you want to chuck away all the money we taxpayers pumped into it? RBS are repaying the loans/investments we made in it and OUR shares (like Lloyds TSB) will eventually be sold at a profit. Throw that in the bin eh? We might all be better off in the long run if we moved our accounts to the bailed out banks rather than deserting them.

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Let the rubbish bank go bust.

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Only a few months earlier they had announced profits of over £10BILLION! What competent board announces such a profit without knowing the real and true state of the company? Know what I'm saying? The fact that if the action is successful may mean that shareholders including the government may have to pay back the amount raised by the rights issue is irrelevant. If there were lies told in the prospectus then the bank, its then executive, the accountants, solicitors etc that were involved in the rights issue are the ones who should pay up. By the way DM - check out when the banks finance director left, i.e. some months before the rights issue citing family reasons but a year or so later was back in the City. What did he know and did he get out early so as not to be tarnished? Makes you think.

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Is that a threat from RBS, Are they running scared of muck rakers and bringing more truth in to the open!

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thats right now goodwins in hiding on a "pension" of 350k per year....A PENSION and not one word of apologiy from his lying filthy mouth. 5 mins in a room with him.

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You buy shares, you either make or lose money, stopping bleating about it.

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On an even playing field you buy shares and take risk you are correct but not when you are being deceived about the real state of the business as clearly was the case here bit like betting a horse and the trainer knows it is injured you have no chance of success.

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On an even playing field you buy shares and take risk you are correct but not when you are being deceived about the real state of the business as clearly was the case here bit like betting a horse and the trainer knows it is injured you have no chance of success.

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SHUT IT DOWN. ITS A DISGRACE TO BANKING. SACK THEM ALL

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Wish them well. When are we going to see Gordon Brown, Mervyn King & Darling being sued because they `forgot` to tell/disclose the true state of the HBOS finances before they did a dump on Lloyds TSB and their shareholders? It is one thing to sue the Directors and Executives of a bank because of decisions they made but it is almost treasonable for a Prime Minister and The Govenor of The Bank of England to mislead the Directors, Executives and Shareholders of a Bank by witholding information they should have disclosed whether on purpose or by default. That said the Regulators in the FSA & BoE must have approved the rights issue and I think the Chancellor would also have `been kept in the frame`. RBS & Lloyds are being made the scapegoats for massive failings at a much higher level. Wasn`t it a U.S. President who said "The Buck Stops Here"? The taxpayer will end up paying because the Regulators who WE paid did not do their jobs. Brown, King & Darling should lost their pensions.

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Wow what a defense only Sir Fred could have emailed them with that solution, we took your money and your families money we trusted you with it a share issue you said to help bolster the business in fact it was a crisis loan to save the business and even that was not enough you lost our money my childrens money, your own staffs shares became worthless they trusted you and invested with you people who trusted you for decades to look after them and now your defense is you will bring more innocent people down if you are found liable.

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Quite right, go for their bonuses, including Fred's disgraceful pension as would like to see him downsize and struggle a bit like millions of others due to his ego!

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