RBS shareholder group looks to sue over rights issue

Royal Bank of Scotland shareholders are in talks with litigation funds over launching a potential £3.3bn lawsuit against the bank and former chief executive Fred Goodwin over an ill-fated rights issue in 2008.

According to reports last week, the shareholders, known as the RBoS Shareholders Action Group, are looking to sue the bank, Goodwin, former chairman Tom McKillop and former investment bank chief executive Johnny Cameron for allegedly misleading investors at the time of a £12bn rights issue in 2008.

Shareholders lost 90 per cent of their money after purchasing shares in the rights issue, according to Reuters. Shareholders claim they were mislead by the prospectus, which did not indicate the true strength of the bank. RBS was bailed out by the Government in 2008.

Reports state legal proceedings could start within weeks if the shareholder group manages to secure between £12m and £15m to pay for the cost of a potential defeat.