Shareholders of the Royal Bank of Scotland today issued legal proceedings against the bank and four former directors in a claim that could be worth as much as £4bn.
The RBOS Shareholder Action Group, represented by international firm Bird & Bird, claims that the bank’s directors sought to mislead shareholders by misrepresenting the strength of the bank and omitting crucial information from the 2008 rights issue prospectus.
The group, which represents around 12,000 private shareholders and more than 100 institutional investors, says RBS is liable for losses incurred on shares subscribed to in the rights issue.
The claim is believed to be the biggest of its kind in British banking history, both in terms of value of the claim or the number of claimants.
A spokesman for the group said: ‘Today represents a giant step forward for the many thousands of ordinary people who lost money as the result of inexcusable actions taken by banks and their directors in the financial crisis.
‘Now, for the first time, some of these directors will have to answer for their actions in a British court.’
The action comes a week after international firm Stewarts Law issued a claim form against RBS in the High Court on behalf of 21 claimants, including a number of UK and international financial institutions and pension funds.
The claim concerns the rights issue of April 2008 under which RBS sold shares at £2 per share.
The bank is being represented by international firm Herbert Smith Freehills, although the firm said it was unable to comment on proceedings.