5 year investigation finds insufficient evidence to press criminal charges against RBS former chief executive Fred Goodwin or any of his colleagues
Today, 12 May 2016, The Crown Office announced that no criminal charges will be brought against the Royal Bank of Scotland’s former chief executive, Fred Goodwin or any of the senior management who oversaw the near-collapse of the Scottish bank in 2008.
The investigation into RBS was started in 2011 and was the biggest of its kind ever conducted by Scotland’s prosecution service. The near-collapse of RBS which was blamed on the disastrous expansion plans overseen by Goodwin, resulted in the bank having to be rescued in a £45 billion bailout by the UK Government – the taxpayer. This bailout came just four months after investors pumped £12 billion into the bank through a rights issue resulting in the biggest corporate disaster in British history.
In December 2011, a Financial Services Authority report on the bank’s failure said it “played an important role within an overall financial crisis which produced a major recession.” Even though no action has been taken against any of senior figures in charge of the Edinburgh-based bank that could all change if new evidence emerges through a civil action being brought against the RBS by shareholders.
The Crown Office revealed on Thursday that its investigation had concluded after a large team of specialists examined more than 160,000 documents. A spokesman said today: “The failure of RBS is an issue of great public concern. The Crown undertook a thorough, independent investigation following publication of the FSA report in December 2011.
“The Crown’s investigation focussed on the rights issue of April – June 2008, and involved detailed consideration of whether there was any evidence of criminal conduct associated with the rights issue.
“This was an extremely complex investigation which included the examination of over 160,000 documents by a team of specialist forensic accountants and banking experts, supervised by the Serious and Organised Crime Division.
“The failure of RBS is an issue of great public concern. The Crown undertook a thorough, independent investigation following publication of the FSA (now FCA) report in December 2011.
“If there were such evidence those responsible would face prosecution. If not, the public in Scotland could be reassured that the matter had been properly investigated.
“The investigation involved close co-operation with a range of financial regulators and banking institutions, including the Financial Conduct Authority, the Prudential Regulation Authority, the Federal Reserve Bank of New York, the Serious Fraud Office and the Financial Reporting Council.
“Following careful examination of all the evidence seen to date, Crown Counsel have decided that there is insufficient evidence in law of criminal conduct either in relation to RBS as an institution or any directors or other senior management involved in the rights issue.
“If any further evidence comes to light which is relevant to this enquiry it will be considered by the Crown and we reserve the right to make further enquiry, if considered appropriate.”
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The £4 billion civil legal action, which is expected to go to trial at the Commercial Court in London in March 2017, has been brought by a reported 63,000 plus small shareholders who are suing RBS over the flawed rights issue which followed the bank’s disastrous takeover of ABN Amro when Fred Goodwin was chief executive.
Investors, many of them small shareholders saw 90 per cent of the value of their shares wiped out within months. 1,700 investors based in Edinburgh suffered average losses of nearly £5500, with many more victims affected by losses through pension funds.
Fred Goodwin was stripped of his knighthood four years ago and agreed to take a cut in his RBS pension following the near-collapse and subsequent taxpayer bailout of the banking group.