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FSA clears RBS but refuses to reveal secret probe details

Royal Bank of Scotland: ’The issues we investigated do not warrant us taking enforcement action’

The FSA has closed its investigation into the Royal Bank of Scotland, saying the bank made “bad decisions” but they were not the result of a lack of integrity.

It says it did not identify instances of fraud or dishonest activity by RBS senior individuals or a failure of governance on the part of the board.

The announcement means controversial former chief executive of RBS Fred Goodwin has been cleared as far as the FSA is concerned.

The FSA launched the probe into RBS in May 2009 to examine the conduct of senior individuals, the bank’s acquisition of ABN Amro in 2008 and its capital-raisings in 2008. It was led by PricewaterhouseCoopers.

An FSA statement last week said: “The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals.
However, the competence of RBS individuals can, and will, be taken into account in any future applications made by them to work at FSA-regulated firms.”

RBS was nationalised in October 2008 in a bailout worth £45bn after Goodwin led an acquisition of parts of ABN Amro just as the financial crisis erupted. He was later slammed by taxpayer groups over his retirement package, which included a pension worth over £700,000 a year.

The FSA says it cannot publish the content of the RBS review as information gathered from the bank is confidential under the Financial Services and Markets Act.

Law firm Bargate Murray says people want to know what happened within RBS before its collapse. Partner Andrew Murray says: “I am sure there are many taxpayers who would like to peer into that Pandora’s box and find out more about the role of Sir Fred Goodwin. Although the investigation was carried out by a lame and toothless tiger, I would have expected the FSA to have one last huzzah before falling on its sword.”


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