News In Focus
RBS US class action falls flat
UK investors’ attempt to mount a class action suit against RBS in the US courts has largely failed, after a New York district judge threw out the main claims around the bank’s semi-nationalisation in 2008. Following a similar ruling in the Supreme Court in June, relating to National Australia Bank, this week’s decision effectively means UK ordinary shareholders cannot pursue claims against RBS in the US courts.
The class action suit covered a number of investors who had acquired shares in the bank between 1 March 2007 and 19 January 2009, during which time their value dropped 98% amid fears over the bank’s potential exposure to sub-prime lending losses. A number of those involved in bringing the suit participated in RBS’s £12bn rights issue just months before the bank was effectively nationalised.
A spokesman for the bank welcomed the judge’s decision and vowed to “defend the remaining claims vigorously”.