A group of 21 pension funds and investment firms sued Royal Bank of Scotland Group claiming the lender misled them about its finances when selling new shares in 2008, months before a U.K. government bailout.
Lawyers representing trusts run by ING Groep NV and John Hancock Financial Services Inc., as well as pension funds including the $38.1 billion Illinois Teachers' Retirement System, Springfield, and the £11 billion ($16.7 billion) Mineworkers Pension Scheme and the £8.7 billion British Coal Staff Superannuation Scheme, both of Sheffield, England, filed a lawsuit in a London court Thursday, according to an e-mailed statement.
RBS made misleading statements to investors ahead of its rights issue and didn't reveal weaknesses in its balance sheet, according to the statement from the plaintiffs' law firm, Stewarts Law.
“Although the prospectus portrayed an image of the bank being in a state of financial good health and stability, the reality was very different,” lawyers said in the statement.
The law firm didn't specify what damages the shareholders are seeking, beyond saying the suit is for “millions of pounds (sterling).”
RBS is 81% owned by British taxpayers after getting the world's biggest bank bailout — £45.5 billion — in 2008 and 2009. The lender had raised £12 billion from investors in the share sale before collapsing under the weight of bad loans.
Michael Strachan, a spokesman for Edinburgh-based RBS, declined to comment.
Another group of RBS shareholders, including about 12,000 small investors, are planning a separate class-action lawsuit in the U.K. over the rights issue. Their spokesman Locksley Ryan said in a phone interview that the claim wasn't yet ready to be filed.
