Royal Bank of Scotland (RBS) investors have been in talks with litigation funds discussing the potential launch of a £3.3bn lawsuit against the bank and its former chief executive, Fred Goodwin, according to reports.
The Times said if the investors can secure the necessary £12m to £15m for insurance against the cost of a defeat, proceedings will begin by the end of the month, sources familiar with the situation said.
The RBoS Shareholders Action Group accuses the bank of misleading investors at the time of its £12bn rights issue in 2008. It is backed by HSBC, Deutsche Bank, State Street, Credit Agricole and Collins Stewart, who are among 91 institutional investors understood to be backing the legal challenge.
The report said the group planned to sue RBS and Goodwin, as well as the former chairman, Sir Tom McKillop, and the former investment bank chief, Johnny Cameron, "because it argues that the prospectus gave a falsely positive description of the bank and its balance sheet at the time".
Has run Cautious Managed fund since 2011
What’s right – not what sells
Richards fires back at committee report
Available on Investcentre platform
Invested from 2006-2011