Royal Bank of Scotland is facing legal action over the collapse of MF Global after two pension funds accused the bank of making misleading statements about the broker's $6.3bn (£3.9bn) exposure to European sovereign debt.
The IBEW Local 90 Pension Fund and the Plumbers & Pipefitters' Local #562 Pension Fund are suing RBS, JP Morgan and Goldman Sachs in a class action lawsuit in New York, following the collapse of the broker, Bloomberg reported according to the Telegraph. The pension funds claim MF Global's stock traded at "artificially inflated prices," as a result of the banks' misleading statements. "While the extent of MF Global's exposure to European sovereign debt was concealed, the defendants were able to raise some $900m in the offerings," they said. The funds' case is understood to rest on a...
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