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Cable investigates possible action against RBS directors

Business Secretary Vince Cable says he is investigating whether any action can be taken against any Royal Bank of Scotland directors who were at the bank in the run up to its near collapse in 2008.

In a report published today, the FSA admitted it had a significant part to play in the near collapse of the bank. The report reveals the bank had a weak capital position, was too reliant on short-term wholesale funding and that senior management made some poor decisions in the run up to its bailout, specifically relating to the acquisition of ABN AMRO.

Following the publication of a previous report on RBS by PricewaterhouseCoopers, the Department for Business, Innovation and Skills investigated whether it should disqualify any of the bank’s directors.

Cable says he is now investigating whether he should take similar action against former RBS directors following the publication of the FSA’s report into the bank.

He says: “The report mentions that previous reports on RBS by PwC were disclosed to my officials earlier this year. This information was provided so they could take a view on whether there was sufficient evidence to suggest I should take action against any director by way of disqualification. Counsel advised them that it would not be appropriate to bring proceedings on the information contained in them.

“Now that I have received the FSA’s report, I am immediately instructing Counsel to provide further advice on what course of action is open to me.”

In the FSA’s report, the regulator said there is not sufficient evidence to bring enforcement action against any one member of RBS’s senior management team or board which has a reasonable chance of success in tribunal or court proceedings.

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. Wow I bet they’ll be terrified of the mighty Vince.

  2. I’ll be investigating the possibility of winning the lottery this Saturday by buying a ticket.

    I suspect both Mr Cable and I have a similar chance of success, although at least my intention is genuine.

  3. OK so Vincey-boy talks big.
    But in reality, I don’t see why the key players in the banks who signed off on the reckless and negligent behaviour, cannot be dragged through the courts and gutted of all their gains.

  4. And the ‘key figures’ at the FSA who were culpable and negligent?

    Oh! I forgot. It’s this lot that Cameron was so busy defending last week, and creating mayhem in order to ‘protect’ us all from the evil EU rule makers.

    Pass me the sick bag, quick.

  5. Do you think he will be pursuing the Labour governement who signed off on the ABN deal with “lighttouch” dilligence? What about Adair Turner who headed up the FSA at the same time?
    Haven’t we the taxpayers wasted enough money on this particular debarcle!
    Blaming everyone else, but the government and its associated quangos, will not make it right or make it go away. The board of RBS were wrong in most of what they did but they were allowed to get away with it by the two bodies mentioned. The people on the street were let down by the apathy and ignorance of those who were supposed to protect us from this sort of thing. Maybe Vince would like to direct his attention to making sure that products pedalled by our banks are clearly understood and of good quality!!

  6. Yes, the Labour government got it wrong and the FSA did not fulfil their duties by any measure.

    They should be accountable, but in the final analysis, you don’t blame the police if someone burgles your home – you blame the burglar.

    The police were asleep on the job and should be sacked, but the burglar should be in prison where he belongs.

  7. If this were China, Goodwin, McKillop and co would be serving hard labour by now. Only in England can crooks get away scot free for committing fraud or if they are jailed gain compensation for sloping out!!!!

  8. i feel there is a case for negligent misrepresentation in the first instance; at their
    selection interviews did they recklessly pass themselves of a competent individuals suitably qualified to run a Bank. It was suprising that a man was brought in from a supermarket and givien a whole financial institution to run. RBS took an accountant and dressed him up as a Banker see how they paraded themselves in front of the select committee – none with a formal Professional Banking qualification. This strengthens the case for apprenticeship in all industries previously no novice would have found their way to a Bank boardroom so soon after coming out of nursery school. Well the nation paid a heavy price and I know nothing will be done that is a write off there should be sequastration of their assets. The arrogance was sickening, real Bankers are roaming the streets tossed out of their life long professions whereas the new breed of wonder boys came in to egg the pudding. If Vince Cable can come up with any action I will be pleased but I will not hold my breath. There is need to look at the way they were appointed – poor depositors old ladies char ladies,street sweepers, nurses, firemen, bus drivers, on paltry sums all have been robbed. Today we see masses on the dole kids out of university no job. In the name of God let someone pay enough is enough.

  9. The RBS board exhibited a collossal amount of hubris because they didn’t see the need to undertake sufficient due diligence when taking over ABN Amro. In fact they went for ‘due diligence light’
    This is undoubtedly incompetent and negligent.
    For the non-exec. directors to allow this to happen is undoubtedly negligent.
    For the FSA to allow a bank to operate in this way is negligent and incompetent.
    But thankfully nobody is really to blame and all the culprits can run away with their jobs, pensions and bonuses intact.
    The fact that we complicitly put up with all this garbage is …….

  10. Anybody remember the greedy Phoenix four and the running of MG Rover into the ground at the cost of thousands of jobs? Vince will be no more sucessful in action against RBS directors because it requires the directors not to dispute the facts,which their lawyers no doubt will. Rover RBS – exactly the same situation.

  11. It’s interesting to see mention of the Department for Business, Innovation and Skills, the successor quango to the Department for Business Enterprise & Regulatory Reform, under whose aegis, in 2007 (the very same year in which Hector Sants took office), the studiously ignored and completely unenforced Statutory Code of Practice for Regulators was first published. Let’s take a look at what it says:-

    “The Regulators’ Compliance Code is a central part of the Government’s better regulation agenda. Its aim is to embed a risk-based, proportionate and targeted approach to regulatory inspection and enforcement among the regulators it applies to (needless to say, this must surely include the FSA).

    Our expectation (wishful, to say the least) is that as regulators integrate the Code’s standards into their regulatory culture and processes, they will become more efficient and effective in their work. They will
    be able to use their resources in a way that gets the most value out of the effort that they make, whilst delivering significant benefits to low risk and compliant businesses through better-focused inspection activity, increased use of advice for businesses, and lower
    compliance costs.”

    “risk-based, proportionate and targeted”?? Whatever happened about that, then? Lost (by the FSA’s own admission) in the great drive to steamroller through the RDR.

    Disgraceful barely hints at what the FSA has allowed to happen.

  12. shouldn’t the FSA be more accountable? they produce a report that says they got it wrong…. great!

    is it just me or are there many similarities with RBS and Keydata??? When will the FSA come out and say that they,” it had a significant part to play in the near collapse of the bank. The report reveals the bank had a weak capital position, was too reliant on short-term wholesale funding and that senior management made some poor decisions in the run up to its bailout, specifically relating to the acquisition of ABN AMRO.” just replace the word bank, with Keydata, and ABN AMRO with structured life settlements.

    hey bingo….. job sorted.

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