US pension funds bring class action suit against RBS
Two US-based pension funds have been appointed lead plaintiffs in a class action brought by a group of one-time Royal Bank of Scotland (RBS) investors. A district court judge named Massachusetts Pension Reserves Investment Management Board and Mississippi Public Employees’ Retirement System, which bought RBS shares between 6 June 2007 and 9 January 2009. The pension funds are said to have lost £85m in RBS, which was bailed out by the British Government in October after conducting a £12bn rights issue in April last year.
Several other European-based pension funds are also involved in the suit against RBS. Merseyside Pension Fund, North Yorkshire Pension Fund and PME had retained the services of law firm Coughlin Stoia earlier this year to pursue a class action in the US courts, as well as controversially hiring Cherie Booth QC, wife of former prime minister Tony Blair, as a ‘special adviser’ on the case, according to IPE.
Lawyers Labaton Sucharow and Cohen Milstein Sellers & Toll have been appointed to represent pension funds in the US class action suit, which alleges that RBS misled investors for 18 months about its financial health. They argue that RBS “falsely reassured” investors that it was well capitalised. All pension fund companies involved are likely to continue to watch the case, which has been brought against the banking group for earlier statements about its financial status prior to and following the purchase of Dutch investment bank ABN Amro.
