GLOBAL - Two major US pension funds have been appointed as lead plaintiffs in a class action against UK-headquartered banking group RBS, ahead of European pension funds who had also hoped to pursue the firm for alleged false disclosure of its true financial status.
Two UK local authority pension funds and one Dutch industry-wide pension fund 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. (See earlier IPE story: Pension funds file class action against RBS)
However, Merseyside Pension Fund, North Yorkshire Pension Fund and PME lost out yesterday in their bid to gain lead plaintiff status against RBS, as Massachusetts Pension Reserves Investment Management Board (Mass PRIM) and Mississippi Public Employees' Retirement System (Mass PERS) were granted lead status to an action by ordinary purchasers of shares between 6 June 2007 and 6 January 2009.
All pension funds who have expressed an interest 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 Abn Amro.
Labaton Sucharow as well as Cohen, Milstein, Sellers & Toll are acting as lawyers in this case, alongside Wolf Pepper, for the case being heard by US District Court Judge Deborah Batts.
RBS is accused falsely reassuring that the group was well-capitalised, when it was actually "effectively insolvent" through "impaired assets, bad loans, and its disastrous partial acquisition of Abn Amro in 2007.
It was only in January this year that RBS revealed the full extent of its losses, even though it began talks with the UK government in October last year to secure a rescue package for the bank.
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